Annual Report 2018ir.chartnexus.com/perisai/docs/AR/2018.pdfAnnual Report 2018 03 OFFSHORE DRILLING DIVISION Perisai’s Jack-Up Drilling Rig, Perisai Pacific 101, is a PPL Pacific

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Annual Report 2018

To be the global symbol

of excellence across our

offered services through

safe, efficient and high

quality solutions.

- Ensuring full compliance to the highest

standards of health and safety within our

operations and workplace.

- Becoming a customer focused organisation

in delivering superior services.

- Continually improving in all aspects of our

business and operations.

- Developing a high performing workforce

with emphasis on the development of local

competencies.

- Meeting the highest standards of corporate

governance and international best practices.

Vision Mission

Contents

02 About Us

04 Corporate Information

05 Corporate Structure

06 5-Year Financial Highlights

About Perisai

Mahkota Ballroom II

Hotel Istana Kuala Lumpur City Centre

73, Jalan Raja Chulan

50200 Kuala Lumpur

Thursday, 29 November 2018

10.00 a.m.

15Annual General Meeting

th

Leadership

08 Board of Directors

14 Management Team

Perspective

18 Chairman’s Statement

20 Management Discussion and Analysis

Financials

70 Directors’ Report

76 Statements of Profit or Loss and Other Comprehensive Income

79 Statements of Financial Position

81 Statements of Changes in Equity

86 Statements of Cash Flows

89 Notes to the Financial Statements

171 Statement by Directors

171 Statutory Declaration

172 Independent Auditors’ Report

Other Information

176 Analysis of Shareholdings

178 Thirty (30) Largest Shareholders

179 Notice of Fifteenth Annual General Meeting

• Form of Proxy

Sustainability & Governance

26 Sustainability Statement

40 Corporate Governance Overview Statement

56 Nomination Committee Report

59 Statement on Risk Management and Internal Control

64 Audit Committee Report

67 Additional Compliance Information

68 Statement of Directors’ Responsibility

Perisai Petroleum Teknologi Bhd. (632811-X)02

About usPerisai Petroleum Teknologi Bhd. (“Perisai”) is a Malaysia-based upstream oil & gas service provider and is listed on the Main Market of Bursa Malaysia Securities Berhad. Through our four business segments, the Perisai Group owns a fleet of strategic oil & gas vessels and facilities supporting the exploration, development and production phases of offshore oil & gas fields. These business segments are the following:

Annual Report 2018 03

OFFSHORE DRILLING DIVISION

Perisai’s Jack-Up Drilling Rig, Perisai Pacific 101, is a PPL Pacific Class® 400 Rig with technologically advanced drilling capabilities. Perisai Pacific 101 is designed and equipped to drill high pressure and high temperature wells as deep as 30,000 feet. It is also capable of operating in water depths of up to 400 feet, performing offline activity while drilling, and can be jacked-up with full pre-loading tanks. It is equipped with full service accommodation for 150 personnel.

OFFSHORE PRODUCTION DIVISION

Perisai’s Floating, Production, Storage & Offloading (“FPSO”) vessel, Perisai Kamelia, is a gas export FPSO that can support gas export of 175MMscfd @ 2000psi with 275,000 bbls storage capacity.

The Rubicone is a BV Class Mobile Offshore Production Unit (“MOPU”), converted in 2011 from a BMC-250 Mat Supported Jack-Up Platform. Weighing 5,113 tonnes, it has a daily production capacity of 165 MMscfd of gas and 7,306 barrels of fluid.

OFFSHORE SUPPORT DIVISION

Perisai owns a fleet of nine Offshore Support Vessels (“OSV”) supporting the offshore development and production of oil and gas fields. Our fleet comprises three anchor handling tug supply vessels, three anchor handling tugs and three crew boats.

OFFSHORE CONSTRUCTION DIVISION

The Enterprise 3, built in 2008, is an ABS Class A1 Derrick Lay Barge capable of installing offshore structures and pipelines.


CorporAte InformAtIon

BOARD OF DIRECTORS

Dato’ Anwarrudin Bin Ahamad Osman Independent Non-Executive Chairman

Datuk Zainol Izzet Bin Mohamed Ishak Managing Director

Dato’ Yogesvaran A/L T. Arianayagam Independent Non-Executive Director

Dato’ Dr. Mohamed Ariffin Bin Hj. Aton Non-Independent Non-Executive Director

Chan Feoi Chun Non-Independent Non-Executive Director

AUDIT COMMITTEEDato’ Yogesvaran A/L T. Arianayagam (Chairman)

Dato’ Anwarrudin Bin Ahamad Osman

Chan Feoi Chun

REMUNERATION COMMITTEEChan Feoi Chun (Chairman)

Dato’ Yogesvaran A/L T. Arianayagam


NOMINATION COMMITTEEDato’ Yogesvaran A/L T. Arianayagam (Chairman)


Dato’ Dr. Mohamed Ariffin Bin Hj. Aton

EMPLOYEES’ SHARE OPTION SCHEME (ESOS) COMMITTEEDato’ Anwarrudin Bin Ahamad Osman (Chairman)

Datuk Zainol Izzet Bin Mohamed Ishak



Chan Feoi Chun

SENIOR INDEPENDENT DIRECTOR IN CHARGE OF SHAREHOLDER COMMUNICATIONDato’ Yogesvaran A/L T. ArianayagamE-Mail : [email protected]

COMPANY SECRETARIESTai Yit Chan (MAICSA 7009143)

Tan Ai Ning (MAICSA 7015852)

REGISTERED OFFICELot 6.05, Level 6, KPMG Tower8 First Avenue, Bandar Utama47800 Petaling JayaSelangor Darul EhsanTel : 03-7720 1188Fax : 03-7720 1111Website : www.boardroomlimited.com

PRINCIPAL PLACE OF BUSINESSSuite 3A-17, Level 17, Block 3APlaza Sentral, Jalan Stesen Sentral 550470 Kuala LumpurTel : 03-2278 1133Fax : 03-2278 1155Website : www.perisai.bizE-Mail : [email protected]

SHARE REGISTRARMega Corporate Services Sdn. Bhd.Level 15-2Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel : 03-2692 4271Fax : 03-2732 5388

AUDITORSBaker Tilly Monteiro Heng (AF 0117)Baker Tilly MH TowerLevel 10, Tower 1, Avenue 5Bangsar South City59200 Kuala LumpurTel : 03-2297 1000Fax : 03-2282 9980

STOCK EXCHANGE LISTINGMain Market of Bursa MalaysiaSecurities BerhadStock Name : PERISAIStock Code : 0047


CorporAte struCture

PERISAI PETROLEUM TEKNOLOGI BHD.

100% Perisai Drilling Holdings Sdn Bhd

100% Perisai Production Holdings Sdn Bhd

100% Perisai Capital (L) Inc

100% Alpha Perisai Sdn Bhd

100% Corro-Pro (L) Inc

100% Corro-Shield (SEA) Sdn Bhd

100% Romilly (M) Sdn Bhd

51% Intan Offshore Sdn Bhd

51% SJR Marine (L) Ltd

51% Perisai Offshore Sdn Bhd

51% Larizz Energy Services Sdn Bhd

40% Larizz Petroleum Services Sdn Bhd

32% Phoenix Energy Sdn Bhd

100% Perisai Drilling Services Sdn Bhd

100% Perisai Drilling Operations Sdn Bhd

100% Perisai Drilling Sdn Bhd

100% Perisai Pacific 101 (L) Inc

100% Perisai Pacific 103 (L) Inc

100% Intan Offshore (L) Ltd

100% Lewek Swift Shipping Pte Ltd

100% Sarah Pearl Shipping Pte Ltd

100% Lewek Mallard Offshore Sdn Bhd

100% Jade Offshore Sdn Bhd

100% Lewek Eagle Offshore Sdn Bhd

100% Perisai Production Services Sdn Bhd

100% Perisai Production Operations Sdn Bhd

100% Garuda Energy (L) Inc

51% Emas Victoria (L) Bhd

51% Victoria Production Services Sdn Bhd


5-Year Financial HigHligHts

Audited

2013 2014 2015 2017 2018RM'000 RM'000 RM'000 RM'000 RM'000

(Restated)#

Revenue 111,663 122,133 214,784 275,587 127,180

Profit/(loss) after tax 82,443 27,258 (688,985) (606,953) (469,253)

Profit/(loss) attributable to the owners of Company 71,785 13,726 (706,318) (560,431) (455,623)

Total assets 1,452,573 2,514,788 2,273,780 1,718,670 1,129,142

Total borrowings 354,035 1,158,077 1,341,495 1,317,964 1,229,496

Total equity/(capital deficiencies) 1,003,362 1,291,716 845,214 250,903 (258,582)

Equity attributable to owners of the Company 902,957 1,170,082 677,614 132,061 (356,825)

Share capital^ 108,453 119,312 120,461 770,888 770,888

Number of ordinary shares in issue*('000) 1,084,128 1,192,725 1,204,207 1,260,472 1,260,472

Weighted average number of ordinary shares in issue*('000) 983,814 1,163,891 1,193,120 1,241,525 1,260,472

Basic earnings per share/(loss per share) (sen)** 7.29 1.18 (59.20) (45.14) (36.15)

Net assets/(liabilities) per share (RM)*** 0.83 0.98 0.56 0.10 (0.28)

Gearing ratio (times)**** 0.39 0.99 1.98 9.98 N/A

# Restated - certain comparative figure have been reclassified, the reclassification in respect of down payment for construction of

jack-up drilling rigs and other related costs (Audited Financial Statement 2014 Note 43)^ the new Companies Act 2016 ("the Act"), which came into effect on 31 January 2017, abolished the concept of authorised

share capital and par value of share capital. Consequently, the amount standing to the credit of the share premium account

of RM640,107,567 became part of the Company's share capital pursuant to the transitional provisions set out in Section

618(2) of the Act* less treasury shares of 400,000** computed based on weighted average number of ordinary shares in issue as at financial year end*** computed based on number of ordinary shares in issue as at financial year end**** computed based on borrowings to equity attributable to owners of the Company**** N/A due to equity attributable to owners of the Company being negative


5-yeAR finAnciAl highlights

127,180 1,129,142

(455,623) (258,582)

Revenue (RM’000) Total assets (RM’000)

Profit/(loss) attributable tothe owners of Company (RM’000)

Total equity/(capital deficiencies)(RM’000)

2013

2013

111,

66

371

,78

5

2013

2013

1,4

52

,573

1,0

03

,36

2

2014

2014

122

,13

313

,72

6

2014

2014

2,5

14,7

88

1,2

91,

716

2015

2015

214

,78

4(7

06

,318

)

2015

2015

2,2

73,7

80

84

5,2

14

2018

2018

1,12

9,1

42

(25

8,5

82

)

2017

2017

275

,58

7(5

60

,43

1)

2017

2017

1,71

8,6

702

50

,90

3

2018

2018

127,

180

(45

5,6

23

)


Independent Non-Executive Chairman

Qualification• BachelorofArts,UniversityofMalaya

Position on the Board• IndependentNon-ExecutiveChairman

Date Appointed to the Board• 1July2012• Re-designated to Independent Non-Executive

Chairman on 15 April 2015

Membership of Board Committees• ChairmanoftheESOSCommittee• MemberoftheNominationCommittee• MemberoftheRemunerationCommittee• MemberoftheAuditCommittee

Working Experience and OccupationDato’ Anwarrudin Bin Ahamad Osman (“Dato Anwaruddin”) joined the Malaysian Civil Service in 1966 and served in the Ministry of Defence. In May 1975, he joined Petronas and served in various capacities until his retirement in 1998 as Managing Director/Chief Executive Officer of Petronas Dagangan Berhad.

Dato’ Anwarrudin held various senior positions during his 23 year career in Petronas. He was the General Manager of Corporate Planning Division in 1984, General Manager, Human Resources Management Division in 1985 before heading the International Marketing Division of Petronas responsible for sales of crude and products and processing of crude.

He was a member of the Asean Council on Petroleum (ASCOPE) technical committee for several years and spoke at ASCOPE oil marketing management seminars and local seminars on prospects and challenges in the marketing and distribution industry. He represented Malaysia in the OPEC/NON-OPEC dialogues from 1989-1991 and sat on the Petronas Management Committee from 1992 to 1998.

Directorship of other Public CompaniesNone

Family relationship with any Director and/or any Major Shareholder of the CompanyDato’ Anwarrudin has no family relationship with other Directors or major shareholders of the Company.

Conflict of interest with the CompanyThere is no conflict of interest between Dato’ Anwarrudin and the Company.

Conviction for any offences within the past 5 years other than traffic offencesDato’ Anwarrudin has had no conviction for any offences within the past five years and no public sanctions by any regulatory bodies during the financial year ended 30 June 2018 other than for traffic offences, if any.

Number of Board Meetings Attended from 1 July 2017 to 30 June 2018During the financial year, Dato’ Anwarrudin attended all ten meetings of the Board.

Shareholdings in the CompanyHe does not hold any shares in the Company.

boArd of dIreCtors

Age75

DATO’

ANWARRUDIN BIN AHAMAD OSMAN


DATUK

ZAINOL IZZET BIN MOHAMED ISHAK

Qualifications• BAinActuarialStudies,MacquarieUniversity,Sydney,

Australia• Master in Business Administration, The Cranfield

Institute of Technology, United Kingdom

Position on the Board• ManagingDirector

Date Appointed to the Board• 13April2010• Re-designatedtoManagingDirectoron21April2010

Membership of Board Committees• MemberoftheESOSCommittee

Working Experience and OccupationDatuk Zainol Izzet Bin Mohamed Ishak (“Datuk Izzet”) began his career in 1982 as a Consultant with Hymans Robertson & Co., Consulting Actuaries, London. Upon returning to Malaysia in 1985, Datuk Izzet joined Messrs Kassim Chan & Co. as a management consultant. He left the field of consultancy in 1988 to join Seccolor (M) Industries as its General Manager, a position he held until 1992.

Datuk Izzet joined the Sapura Group of Companies in 1992 as General Manager of Corporate Planning, responsible for the strategic planning and business development activities of the Group. In 1994, he became Chief Executive Officer of Sapura Digital Sdn Bhd, one of the pioneer operators of digital cellular phone (ADAM) in the country. Following the

sale of Sapura Digital Sdn Bhd by Sapura Group, he was appointed as Senior Vice-President of the Energy Division within the Sapura Group before assuming the position of Chief Executive Officer of SapuraCrest Petroleum Berhad on 7 July 2003, a position he held until 31 January 2010.


Family relationship with any Director and/or any Major Shareholder of the CompanyDatuk Izzet has no family relationship with other Directors or major shareholders of the Company.

Conflict of interest with the CompanyThere is no conflict of interest between Datuk Izzet and the Company.

Conviction for any offences within the past 5 years other than traffic offencesDatuk Izzet has had no conviction for any offences within the past five years and no public sanctions by any regulatory bodies during the financial year ended 30 June 2018 other than for traffic offences, if any.

Number of Board Meetings Attended from 1 July 2017 to 30 June 2018During the financial year, Datuk Izzet attended all ten meetings of the Board.

Shareholdings in the CompanyHis shareholdings is disclosed at page 177 of the Annual Report.

boARd of diRectoRs

Age57

Managing Director


Independent Non-Executive Director

Qualification• CharteredInstituteofManagementAccountants,UK(CIMA)

Membership of Associations• Fellow of the Chartered Institute of Management

Accountants, UK (FCMA) • Chartered Accountant with Malaysian Institute of

Accountants (CA)• AssociateMemberoftheCharteredManagementInstitute,

UK (MCMI)• MemberoftheCharteredGlobalManagementAccountants,

USA (CGMA)

Position on the Board• Independent Non-Executive Director

Date Appointed to the Board• 30October2003• Re-designatedtoIndependentNon-ExecutiveDirectoron

29 March 2011

Membership of Board Committees• ChairmanoftheAuditCommittee• ChairmanoftheNominationCommittee• MemberoftheRemunerationCommittee• MemberoftheESOSCommittee

Working Experience and OccupationDato’ Yogesvaran A/L T. Arianayagam (“Dato Yogesvaran”) started his career as a Management Accountant with British Steel Corporation, England in 1974. Upon his return to Malaysia in 1976, he joined Aseambankers Malaysia Berhad and was the Senior Manager and Head of the Corporate Finance Division. In 1984, he left Aseambankers Malaysia Berhad and joined Sampoorna Holdings Berhad as its Chief Executive Officer. In November 1989, he joined Murnivest Sdn Bhd as Managing

Director and currently he is the Managing Director of Asian Pac Management Sdn Bhd, a position he holds since January 2003. Dato’ Yogesvaran brings along 30 years of experience in Corporate Finance, Financial Management and in Mergers and Acquisitions.

Dato’ Yogesvaran has vast experience in corporate advisory work and corporate restructuring exercises.

Directorship of other Public Companies• MWEHoldingsBerhad

Family relationship with any Director and/or any Major Shareholder of the CompanyDato’ Yogesvaran has no family relationship with other Directors or major shareholders of the Company.

Conflict of interest with the CompanyThere is no conflict of interest between Dato’ Yogesvaran and the Company.

Conviction for any offences within the past 5 years other than traffic offencesDato’ Yogesvaran has had no conviction for any offences within the past five years and no public sanctions by any regulatory bodies during the financial year ended 30 June 2018 other than for traffic offences, if any.

Number of Board Meetings Attended from 1 July 2017 to 30 June 2018During the financial year, Dato’ Yogesvaran attended all ten meetings of the Board.


DATO’

YOGESVARAN A/L T. ARIANAYAGAM

boARd of diRectoRs

Age66


DATO’ DR.

MOHAMED ARIFFIN BIN HJ. ATON

Qualifications• BEng (Hons) Chemical Engineering, University of

Surrey, United Kingdom• PhD in Chemical Engineering, University of Leeds,

United Kingdom

Membership of Associations• FellowoftheInstituteofEngineersMalaysia• CharteredMemberofInstituteofChemistryMalaysia• FellowoftheMalaysianScientificAssociation

Position on the Board• Non-IndependentNon-ExecutiveDirector

Date Appointed to the Board• 1June2004

Membership of Board Committees• MemberoftheNominationCommittee• MemberoftheESOSCommittee

Working Experience and OccupationDato’ Dr. Mohamed Ariffin Bin Hj. Aton (“Dato’ Ariffin”) started his professional career in 1970 as a Process Engineer with Esso Refinery based in Port Dickson and later joined the academia as a Lecturer with Universiti Kebangsaan Malaysia (“UKM”). After numerous appointments, Dato’ Ariffin left UKM in 1989 to be part of Petronas Research & Scientific Services Sdn. Bhd. (“PRSS”) as the Deputy Director, Downstream. Upon the corporatisation of PRSS in 1994, he was appointed as PRSS’s Managing Director/

Chief Executive Officer (“CEO”). He was the President and CEO of SIRIM Berhad from 1996 till his retirement on 1 September 2007.


Family relationship with any Director and/or any Major Shareholder of the CompanyDato’ Ariffin has no family relationship with other Directors or major shareholders of the Company.

Conflict of interest with the CompanyThere is no conflict of interest between Dato’ Ariffin and the Company.

Conviction for any offences within the past 5 years other than traffic offencesDato’ Ariffin has had no conviction for any offences within the past five years and no public sanctions by any regulatory bodies during the financial year ended 30 June 2018 other than for traffic offences, if any.

Number of Board Meetings Attended from 1 July 2017 to 30 June 2018During the financial year, Dato’ Ariffin attended all ten meetings of the Board.


boARd of diRectoRs

Age73

Non-Independent Non-Executive Director


Non-Independent Non-Executive Director

Qualifications• Chartered Institute of Management Accountants, UK

(CIMA)• Institute of Chartered Secretaries and Administrators,

UK (ICSA)• Master of Business Studies (Banking & Finance),

University College Dublin, Ireland

Membership of Associations• Fellow of the Chartered Institute of Management

Accountants, UK (FCMA)• Chartered Accountant with Malaysian Institute of

Accountants (MIA)• CharteredGlobalManagementAccountants

Position on the Board• Non-Independent Non-Executive Director

Date Appointed to the Board• 6June2005

Membership of Board Committees• ChairmanoftheRemunerationCommittee• MemberoftheAuditCommittee• MemberoftheESOSCommittee

Working Experience and OccupationMr Chan Feoi Chun (“Mr Chan”) has retired end of November 2017 as the Executive Director of SGI Vacation Club Berhad. He held various senior positions in PJD Holdings Berhad Group of Companies (“PJD Group”). Prior to joining the PJD Group in 1994, he held senior management positions in financial services group of MBF Holdings. He has international working experiences in Britain and Thailand and has more than 34 years of experience in areas

of financial management and business re-engineering. Mr. Chan was a past President of CIMA Malaysia Division and also a past Council Member of MIA. Presently he is also an elected Council Member of CIMA UK.

Directorship of other Public Companies• IRISCorporationBerhad• VersatileCreativeBerhad

Family relationship with any Director and/or any Major Shareholder of the CompanyMr Chan has no family relationship with other Directors or major shareholders of the Company.

Conflict of interest with the CompanyThere is no conflict of interest between Mr Chan and the Company.

Conviction for any offences within the past 5 years other than traffic offencesMr Chan has had no conviction for any offences within the past five years and no public sanctions by any regulatory bodies during the financial year ended 30 June 2018 other than for traffic offences, if any.

Number of Board Meetings Attended from 1 July 2017 to 30 June 2018During the financial year, Mr Chan attended all ten meetings of the Board.


Age65

MR

CHAN FEOI CHUN

boARd of diRectoRs



DATUK ZAINOL IZZET BIN MOHAMED ISHAK Managing Director

mAnAgement teAm

Age57

Date of Appointment : 21 April 2010

Qualifications & ExperienceDatuk Zainol Izzet Bin Mohamed Ishak (“Datuk Izzet”) is our Managing Director and had joined Perisai in 2010. Datuk Izzet began his career in 1982 as a consultant with Hymans Robertson & Co before moving on to Messrs. Kassim Chan & Co in 1985 and subsequently to Seccolor (M) Industries in 1988. Datuk Izzet joined the Sapura Group in 1992 and spent eighteen years in various senior leadership roles there. His last held position before leaving the Sapura Group in 2010 was as the Chief Executive Officer of SapuraCrest Petroleum Berhad. Datuk Izzet is a graduate of Macquarie University, holding a BA in Actuarial Studies. He also holds a MBA from The Cranfield Institute of Technology, United Kingdom.


BeRAMKHAN BiN tAMBiKHAN Chief Operating Officer

Age53

Date of Appointment : 1 January 2015

Qualifications & experienceEncik Beramkhan Bin Tambikhan (“Beram”) is our Chief Operating Officer and Head of Drilling of Perisai. He joined Perisai in 2012. Beram started his career in 1989 with Sarawak Shell Berhad/Sabah Shell Petroleum Company as Wellsite Petroleum Engineer & Assistant Drilling Supervisor rising to the role of Senior Production Technologist & Assistant Field Coordinator. After a six-year tenure, Beram moved to Crest Petroleum Berhad where he held various positions both domestically and internationally such as Senior Production Technologist of Uzmal Oil, Manager of Drilling & Production of PT Petronusa Bumibakti, Senior Manager of Project Services and Senior Manager of Special Projects (2003-2005). In 2005, Beram left SapuraCrest Petroleum Berhad to join UMW Standard Drilling Sdn Bhd/UMW JDC Drilling Sdn Bhd as Senior General Manager. Beram’s last held position in UMW was as Senior General Manager, Group Corporate Development Division. Beram holds a BSc in Petroleum Engineering from University Technology of Malaysia.

management team

Age53

YeO PeCK CHiN Chief Financial Officer

Date of Appointment : 1 July 2008

Qualifications & experienceMr Yeo Peck Chin (“Yeo”) is our Chief Financial Officer. Yeo started his career in 1992 with an established local audit firm, Messrs Azman, Wong, Salleh & Co. In 1994, Yeo moved to Hong Leong Property Management Co Sdn Bhd, a property management arm of Hong Leong Properties Berhad, as an Assistant Accountant rising to the position of Finance Manager. In 1997, he joined Corroless (M) Sdn Bhd where he took up the post of Assistant General Manager – Finance. He joined Perisai in 2004. Yeo is a fellow member of Association of Chartered Certified Accountants (FCCA) and a member of the Malaysian Institute of Accountants (MIA).


management team

CHOW HAU MUN, DANIEL Head, Legal and Corporate Secretarial

Age54

Date of Appointment : 16 January 2017

Qualifications & ExperienceMr Daniel Chow Hau Mun (“Daniel”) is our Head, Legal and Corporate Secretarial. He graduated with LLB (Hons) from the University of Malaya in 1987 and was admitted to the Malaysian Bar in 1988. Daniel has extensive experience in legal practice and also held the position as in-house legal counsel in several corporations e.g. Hong Leong Management Co. Sdn Bhd, Abric Berhad and M3nergy Berhad. Prior to joining Perisai, he served as the Division Head, Corporate Services in Nam Cheong Limited. Daniel has wide ranging experience in legal matters pertaining to international trade, oil & gas and offshore marine services.

Age66

TEO HOCK CHOONHead, Support Services

Date of Appointment : 16 February 2012

Qualifications & ExperienceMr Teo Hock Choon (“Teo”) is our Head of Support Services. He joined Perisai in 2012. Teo started his career in 1972 with Sea Supply (S) Pte Ltd. as an Accountant rising to the post of Division Controller. In 1980, Teo moved to MidContinent Supply Eastern Hemisphere Co. as its Finance & Administration Manager. Between 1988 and 1989, Teo consulted for Presstek Industries Pte. Ltd. before moving on as Finance & Administration Manager of InterChem Pte Ltd from 1989 to 1991. Thereafter, Teo took on the role of Financial Controller of Offshore Pipelines International Limited/J Ray McDermott S.A for a duration of four years from 1991. From 1995 to 2011, Teo was part of SapuraCrest Petroleum Berhad undertaking various roles from that of Head of Singapore Operations, Head of Department-Project Costing, and General Manager-Commercial Division. His last held position in the SapuraCrest Group was as Director- Business Services & Control, and Advisor-Group Supply Chain Management. Teo holds a MBA (Option in Financial Management & Accounting) from the University of Leicester, UK and a Diploma in Management Accounting & Finance from the Singapore National Productivity Board.


management team

ABduLAH BiN YuNuS Head, Human Resources & Administration

Age63

Date of Appointment : 1 July 2012

Qualifications & experienceEncik Abdulah Bin Yunus (“Abdulah”) is our Head of Human Resources & Administration. He joined Perisai in 2012. Abdulah started his career in 1978 as an Assistant Manager in a confectionery business before moving on to Caltex in 1984 where he spent five years marketing lubricants, diesel and other petroleum products. In 1990, Abdulah started his employment with the Sapura Group where he spent the next 22 years undertaking a variety of roles and responsibilities spanning sales and marketing, business planning, product development, human resource and administration. His last held position in the Sapura Group was as General Manager, Business HR Management in SapuraCrest Petroleum Berhad. Abdulah is a graduate of Southern Illinois University holding a BSc in Marketing and a MBA from Morehead State University, Kentucky, USA earned in 1984.

iSMARitA BiNti iSMAR Head, Corporate Planning

Date of Appointment : 1 June 2018

Qualifications & experienceMs. Ismarita binti Ismar (“Ismarita”) is our Head of Corporate Planning. She joined Perisai in 2013. She started her career in 1997 as an auditor in one of the big 4 accounting firms, Arthur Andersen & Co. before gaining experience in the investment banking sector after joining Aseambankers Malaysia Berhad (“Aseambankers”) in 2003. She spent 3 years in Aseambankers in the Corporate Finance department where she was primarily involved in assisting clients to undertake various equity fundraising exercises, initial public offerings and mergers & acquisition transactions and where her last position held was as Assistant Vice President. Thereafter, she joined SapuraCrest Petroleum Berhad in 2006 as Manager in the Business Planning department. She spent 5 years in SapuraCrest where her last held position was Senior Manager. Ismarita holds a BSc in Accounting and Finance from University of Wales Cardiff, UK and is a member of the Institute of Chartered Accountants in England & Wales.

Age43

deCLARAtiON BY MANAGeMeNt teAMDirectorship of other Public Companies - NoneFamily relationship with any director and/or any major shareholder of the Company - NoneConflict of interest with the Company - NoneConviction for any offences within the past 5 years and public sanctions or penalty imposed by the relevant bodies during the financial year ended 30 June 2018 other than traffic offences - None


CHAIRMAN’S STATEMENT

‘‘‘‘The past 12 months had seen the Company going through a very difficult period, following a series of events which unfolded since late 2016. These started off with the default on the SGD-denominated medium term notes (“MTN”) and the subsequent classification as a Practice Note 17 (“PN17”) company by Bursa Malaysia Securities Berhad (“Bursa Securities”).

Concurrently, there were legal threats by parties and not to mention, the on-going dispute with EMAS Offshore Limited (“EOL”), all on the back of the industry downturn which affected oil & gas players worldwide and across the value chain.

Despite all these, we remain focused on our efforts to steer the Company towards stability, and with the assistance and guidance from our advisers and the Corporate Debt Restructuring Committee (“CDRC”), we were able to reach significant milestones in our restructuring journey. CDRC is a body established by Bank Negara Malaysia to mediate between corporate borrowers and their creditors in formulating viable debt resolutions. We were fortunate to have the continuing support from our lenders and creditors as demonstrated in the favourable outcome of the Creditors Court Convened Meeting (“CCM”), which saw 88% voted in favour of our proposed scheme of arrangement.

Simultaneous to our debt restructuring plan, we had also been working on putting together our proposed regularisation plan, in addressing the Company’s PN17 status. However, as the proposed debt restructuring scheme forms an integral part of our regularisation plan, it was crucial that we have the lenders’ “vote of confidence” prior to submission of the proposed regularisation plan being made to Bursa Securities. The favourable results from the CCM provided some level of assurance on the viability of our proposed regularisation plan and with this, submission was duly made to Bursa Securities on 1 August 2018.

Operationally, our jack-up drilling rig, the Perisai Pacific 101, continues to serve Petronas Carigali Sdn Bhd (“PCSB”) under the existing contract extension until May 2019. We continue to strive for the highest level of quality service and safety standards, as evidenced by the high average utilisation rate of

Dato' Anwarrudin Bin Ahamad Osmanchairman


been possible without the commitment, dedication and hard work of my fellow Board members, senior management, staff of Perisai and our advisers.

And to that, firstly, I would like to extend my sincere gratitude and appreciation to my fellow Board members for their continued support, guidance and faith shown in the Company. I would also like to express my appreciation to our previous Directors, Mr.Adarash Kumar A/L Chranji Lal Amarnath and D.Y.A.M Raja Puan Muda Perak Darul Ridzuan Dato Seri DiRaja Tunku Soraya Almarhum Sultan Abdul Halim Mu’adzam Shah, both of whom had since resigned from the Board, for their valuable insights and contribution during their tenure with Perisai.

A heartfelt appreciation to our Managing Director, Datuk Izzet Ishak, his team of senior management and the staff of Perisai, for their loyalty and resolve through this challenging period and for their continued hard work, support and commitment given to the Company.

I would also like to express my gratitude to our client, Petroliam Nasional Berhad (“Petronas”) and PCSB for the continuing support and confidence in our asset, Perisai Pacific 101 and our service, as we continue to strive for the highest level of efficiency. A special mention also to CDRC and our lenders for their guidance, understanding and support, which saw us through a very challenging time.

Last but not least, sincere appreciation to all other stakeholders for continuing to stand with the Company as we work together in achieving a common goal for the benefit of all. Given the level of commitment, hard work and perseverance demonstrated thus far, I am optimistic that Perisai will be able to emerge from this trying times stronger and better prepared to face future challenges.

Dato’ Anwarrudin Bin Ahamad OsmanChairman

94% for the current financial year under review and recently, achieving 1,000 lost time injury free days as at 19 August 2018. This, indeed, is a notable and commendable achievement by our Drilling division. We would also continue to closely engage with the existing and potential clients, in view of her impending contract expiry in May next year.

As for our floating production storage and offloading vessel (“FPSO”), the Perisai Kamelia, she is currently laid-up in Tompok Utara, Johor, upon completing preservation work in December 2017. We have been actively pursuing various opportunities throughout the year and would continue to do so as her redeployment is an integral part of our proposed regularisation plan.

For the financial year under review, we recorded revenue of RM127.18 million and losses before tax of RM468.72 million. We would continue to exercise financial discipline and strict adherence to budget, as well as maximising operational efficiencies in our efforts to narrow the losses moving forward. In the meantime, we also remain cautiously optimistic that with Perisai Kamelia securing a new contract and the successful completion of our debt restructuring exercise, Perisai would be able to turn around as planned.

In general, the industry has been on the path to recovery, with oil prices stabilising at a level sufficient enough to ensure the viability of offshore projects. The improved market condition has given us some level of confidence that there would be opportunities on the horizon. Despite this, we do acknowledge that there is still plenty of hard work and challenges ahead of us, as the industry in general, and Perisai in particular, is not completely out of the woods yet.

As such, although there have been several positive developments over the course of the financial year under review, we shall not be complacent and would continue to push ahead in our journey towards stability and sustainability. This would not have

chAiRmAn’s stAtement


Having said that, we would expect that it would take some time until the effects of such improvement are felt by industry players across the entire value chain, including Perisai and as such, in the last 12 months, we continue to face challenges as we forged ahead in our journey towards stability and recovery.

Nevertheless, against the backdrop of an impending market recovery, and after over 1 year of going through a tumultuous period of putting together our debt restructuring plan following the default by our wholly owned subsidiary and consequently, the triggering of the Practice Note 17 (“PN17”) status under the Bursa Malaysia Securites Berhad (Bursa Securities) Main Market Listing Requirements, I am pleased to report that we have, to date, reached several major milestones in our debt restructuring exercise and this had provided us with the much needed positivity to push ahead in our current endeavour.

BUSINESS OvERvIEw

Perisai Petroleum Teknologi Bhd (“Perisai” or “Company”) is a Malaysian offshore services provider to the upstream oil and gas sector, organised into four (4) business segments, namely offshore drilling, offshore production, offshore support vessels and offshore construction. Since we embarked on the transformational change in our business model and direction back in 2010, we had identified both the offshore drilling and offshore production business as our core business segments.

The focus has remained until today, despite the challenges in the environment that we are currently operating in. Under our offshore drilling division, we currently own and operate one (1) jack-up drilling rig, the Perisai Pacific 101, whereas under our offshore production division, we own and operate one (1) floating production storage and offloading vessel (“FPSO”) the Perisai Kamelia, as well as one (1) mobile offshore production unit (“MOPU”), the Rubicone.

MANAGEMENT DISCuSSION AND ANAlySIS

‘‘‘‘INTRODuCTION

There has been some improvement in the industry in general, as the Brent crude oil price slowly but steadily increased throughout 2017 to reach its’ highest of uSD$80 a barrel in May 2018 and signs of offshore activities picking up.

Datuk Zainol Izzet Bin Mohamed Ishakmanaging director


mAnAgement discUssion And AnAlysis

Currently, due to the size of our fleet, we remain focused on the Malaysian market, whilst we continue to pursue opportunities both within, and outside the region.

The offshore support vessels (“OSVs”) division currently owns a fleet of nine (9) vessels, comprising anchor handling tugs, anchor handling tugs & supply vessel and fast crew boats. The offshore construction division owns a derrick lay barge, the Enterprise 3. Moving forward, in line with our overall plan, it is our intention to dispose and exit from both of these divisions.

BUSINESS OBjEcTIvES AND STRATEGIES

Despite the predicament and challenges during the past year, we remain steadfast in our aspiration to be one of the recognised players in the offshore drilling and offshore production segments. As such, on the operational front, it is “business as usual” as we continue to ensure that our operational efficiencies and quality of service are not compromised, whilst striving to manage costs and continue with strict adherence to both, financial and non-financial targets. We also continue to develop our people, through continuous training programmes in our efforts to develop local competencies.

DEBT RESTRUcTURING ExERcISE AND PN17 STATUS

The past year had seen many months of hard work and perseverance coming into fruition as we made significant progress in our debt restructuring efforts. After months of discussions and negotiations with the lenders under the purview of the Corporate Debt Restructuring Committee (“CDRC”) and separately with the SGD denominated multi-currency medium term notes (“MTN”) investors, a Creditors’ Court Convened Meeting (“CCM”) was held on 8 June 2018, pursuant to an order of

the High Court of Malaya, for the lenders and creditors to vote on the Company’s proposed scheme of arrangement. The result from the voting process was overwhelmingly in favour of the Company, with approximately 88% voting in favour of the proposed scheme of arrangement.

This positive outcome definitely provided an impetus to the Company to forge ahead with the next major milestone, being the submission of the proposed regularisation plan to Bursa Securities, which was made on 1 August 2018. Simultaneously, efforts are being put in place in addressing the other aspects of the debt restructuring scheme and proposed regularisation plan to ensure its’ successful completion.

One of the above aspects, which is critical in order for the Company to be able to successfully progress further in its debt restructuring efforts and the proposed regularisation plan, is the securing of new contract for FPSO Perisai Kamelia.

cORPORATE DEvELOPMENT

Following the lapse of the Settlement Agreement in August 2017 and the disagreement over the exercise of the put option for the disposal of our 51% interests in SJR Marine (L) Ltd (“SJR

Marine”) with EMAS Offshore Limited (“EOL”), we had sought legal advice and explored various options. In January 2018, Perisai Production Holdings Sdn Bhd (“PPHSB”), a wholly-owned subsidiary of Perisai had written to the Company Secretary of Emas Victoria (L) Bhd (“EVLB”) to serve a notice that a termination event had occurred enabling PPHSB to terminate the Shareholders’ Agreement dated 21 August 2013 between PPHSB, EOL and EVLB (“EVLB SHA”). EVLB is the company owning Perisai Kamelia in which PPHSB and EOL hold 51% and 49% interests respectively.

EOL’s ongoing efforts to restructure its debts coupled with its application to the Singapore High Court indicated that EOL had resolved to enter into a scheme of arrangement or compromise for the benefit of its creditors or any class of them. This would tantamount to an event of default under the EVLB SHA.

In light of the default, PPHSB required EOL to partially dispose of the shares held by EOL in EVLB to PPHSB at the price of USD1.00. EOL had, subsequently written to Perisai, disputing both, the default and hence the termination of the EVLB SHA, and secondly the disposal price of USD1.00 and thus requiring a valuation of the shares in EVLB to be undertaken.



As part of our effort to preserve our rights for the put option proceeds due from EOL arising from the disposal of our 51% interests in SJR Marine, Perisai had in February 2018, assigned the rights to receive the put option proceeds from EOL to PPHSB and consequently, EOL is irrevocably authorised and instructed to pay the put option proceeds to PPHSB.

Accordingly, in July 2018, Perisai served a Notice of Assignment to EOL in relation to the above assignment.

FINANcIAL PERFORMANcE

For the financial year under review, the Group recorded total revenue of RM127.18 million, approximately 54% lower than total revenue recorded in the previous 18-month financial period ended 30 June 2017 of RM275.59 million. Although the revenue is not exactly comparable due to the different number of months covered under each reporting period, the lower Group’s revenue was mainly due to the expiry of the charter contract for eight (8) of the offshore support vessels in August 2017.

The Group registered loss before taxation of RM468.72 million, as compared to RM605.98 million for the 18-month financial period ended 30 June 2017. The losses for the current financial year mainly arose from impairment losses on plant & equipment, trade receivables and investment in joint ventures, which was partially off-set by the recognition of other income arising from the liquidation of Perisai Pacific 102 (L) Inc. following a winding up order by the Court as well as lower operating costs arising from the on-going cost savings initiatives.

Shareholders’ funds as at 30 June 2018 reduced to a capital deficiency of RM356.82 million, a decrease of RM488.88 million from the position as at 30 June 2017. This was mainly due to the losses further incurred for the financial year ended 30 June 2018

Our drilling and production segments forming our key

operational focus.

Since commencement of operations until to date, a

total of 46 well drilled.

“The high emphasis on

quality, health, safety

and environment

(“QHSE”) culture,

standards and

practices were

evidenced by the

division’s achievement

of 1,000 Lost Time

Injury free days on 19

August 2018.”

and lower foreign translation reserve as a result of strengthening of Ringgit Malaysia.

Total borrowings of the Group decreased to RM1.23 billion as at 30 June 2018 against RM1.32 billion as at 30 June 2017 mainly due to repayment of term loans and a more favourable conversion exchange rate following the strengthening of Ringgit Malaysia.

Continuous cost savings efforts and strict cash management practices have led to an improved cash position for the Group as at 30 June 2018, as compared to the previous year. Group cash and cash equivalent stood at RM23.01 million, which is higher by RM11.39 million or 97.95% than the position as at 30 June 2017.

REvIEw OF OPERATIONS

DrillingOur rig, the Perisai Pacific 101 continues to fulfil her contractual obligation with Petronas Carigali Sdn Bhd (“PCSB”), operating at an average utilisation rate of 94% for the financial year under review.

During the financial year under review, Perisai Pacific 101 has drilled and completed work on eight (8) wells with work on one (1) well still on-going at the time of writing. There are remaining eight (8) wells to be completed until expiry of the current contract extension in May 2019. The Perisai Pacific 101 had, since commencement of operations in August 2014 until to date, drilled fourty-six (46) wells, all within Malaysian waters.

We continue to strive for operational efficiencies with utmost emphasis on compliance with health and safety requirements. The high emphasis on quality, health, safety and environment (“QHSE”) culture, standards and practices were evidenced by the division’s achievement of 1,000 Lost Time Injury free days on 19 August 2018.



Our commitment to building local capabilities has not wavered, as we continue to provide the necessary development and training programs to our people. As at 30 June 2018, 96% of the division’s workforce was made up of Malaysians, slight increase from 95% in the previous year.

There has been some level of recovery in the market segment with the increase in contract awards for jack-ups worldwide. However, the jack-up rig market remains oversupplied and industry players are banking on the recovery to be driven mainly by attrition of older rigs and consolidation within the market, rather than demand-driven factors. Due to this, the outlook is expected to remain challenging with day rates continue to be depressed in the near to medium term.

As such, our focus would remain on delivering quality service to our client, and with the impending expiry of the contract extension by May 2019, we would be aggressively pursuing any potential opportunities within, and outside the region. In addition, the Perisai Pacific 101 would be entering her

5th year of operations by mid-2019 and hence would be required to undergo a Special Periodic Survey (“SPS”) which is a mandatory requirement by the American Bureau of Shipping, being the classification body of the Perisai Pacific 101 and as required under the existing contract with PCSB. This would be a fairly large endeavour which requires careful planning and monitoring, both in terms of operations and funding.

I would expect that the above two (2) matters would be our main focus with respect to the offshore drilling division for the months ahead. Production The two (2) assets within our Production division, namely Perisai Kamelia and Rubicone, are both currently laid up in Tompok Utara, Johor and Tanjung Uncang in Batam, Indonesia respectively.

Perisai Kamelia has been laid-up in Johor since end December 2017, following the completion of preservation work. We have been, and would continue to, actively pursue various potential opportunities identified.

Rubicone is still being laid-up in Batam. Marketing efforts have been intensified during the financial year under review, including the appointment of brokers to assist in identifying potential buyers. We have been receiving inquiries but to date there has not been any reasonable offer to purchase which could be considered. It is also noteworthy that the proposed liquidation of Garuda Energy (L) Inc., the owner of Rubicone and the eventual disposal of Rubicone forms part of our proposed regularisation plan and is in line with our plan to dispose of non-core assets and/or businesses.

Although there has been some improvement in the floating production market in general, with contract awards and orders resuming, the majority of the awards has been for crude FPSOs. Projects involving and requiring a gas-export, early production system such as Perisai Kamelia has been sparse. As such, we would continue to closely monitor the market for any pockets of opportunities which may arise for our Perisai Kamelia.


Offshore Support vessels The charter contract for eight (8) of our OSVs expired in August 2017, whilst one (1) is still contracted to EOL group until September 2021. The OSV market remains challenging especially in view of the continuing oversupply and competition from larger OSV players.

Similar to Rubicone, the proposed liquidation of Intan Offshore (L) Ltd, the owner of the OSVs and the eventual disposal of the OSVs also forms part of our proposed regularisation plan and is consistent with our plan to focus on the drilling rig and FPSO.

Offshore constructionThe dispute with EOL in relation to the put option has yet to be resolved. Whilst we continue to recognise SJR Marine as a jointly-controlled entity in compliance with accounting principles, we maintain the legal position that the put option had been properly exercised and will continue to pursue our rights to receive the put option price.

KEy RISK AREAS

The Group is exposed to risks, not just those which are inherent in the oil & gas industry, but also from a corporate, regulatory and legal perspective. Despite the on-going challenges that the Group is facing, we continue to closely identify, assess and monitor the key risks applicable to the Group and putting in place mitigation measures through proper risk management process.

Key risks areas to which the Group are exposed to are as follows:-

Key Risk Area Description Mitigation Measures

Business

continuity

• Inability to secure new

contract for the FPSO and

PP101.

• Failure to achieve the above

could also lead to failure/

non completion of debt

restructuring exercise.

• Continue regular engagement

with existing and potential

clients.

• Actively seeking for re-

deployment opportunities,

within and outside of the

region.

Legal • Winding up threat by major

creditor.

• Prolonged dispute with EOL

on the SJR Marine put option

and termination of EVLB SHA.

• Ensuring that the Restraining

Order remains in place until

the completion of the debt

restructuring exercise.

• Legal advice has been sought

and we are in the midst of

considering the next course

of action.

Financial • Cash flow depletion in view

of single source of revenue

unable to meet demands

from creditors and corporate

overheads.

• Substantial impairment on

assets impacting Group

accumulated losses.

• Continue to exercise

financial discipline and strict

adherence to budgets.

• Continue efforts in managing

and rationalising costs.

• Intensify marketing efforts to

ensure that the core assets

continue to be deployed. In

addition, regular maintenance

programs are in place to

ensure that the assets are

properly maintained.

Operational/

QHSE

• Catastrophic accident on

board the Perisai Pacific 101,

such as well blow out, fire.

• Perisai has established a strong

QHSE culture and practices

amongst the workforce,

with continuous training

and awareness campaigns.

Properly documented HSE

manuals, processes and

procedures are in place and

are reviewed regularly.



OUTLOOK AND KEy FOcUS

At the start of the financial year under review, Brent crude oil price was hovering close to USD$50 a barrel and has been gradually increasing since, reaching a high of USD$80 a barrel in May 2018, before easing back to between USD$75 – USD$79 a barrel thereafter.

The increase in oil prices can be attributed to the production cuts by the OPEC and non-OPEC countries and strong demand growth from robust economies such as China and India. The improved oil prices have spurred increases in offshore activities as oil majors revisit their spending plan and revived previously shelved projects.

This modest recovery in the industry has, to a certain extent, brought some optimism amongst industry players such as Perisai. However, we remain cognisant of the existing challenges particularly in the jack-up rig and FPSO markets. As such, we would continue to focus our efforts in ensuring that our Perisai Pacific 101 rig continue to deliver high quality services and meeting the expectations of our client, whilst at the same time, working towards identifying and pursuing opportunities for her next deployment. Our attention would equally be on Perisai Kamelia, as securing a new contract for her is also one of the key success factors for our proposed regularisation plan.

NOTE OF APPREcIATION

Since late 2016 as we entered into a very challenging phase in our corporate history, we have remained steadfast in our resolve to steer the Company towards stability and eventual recovery. During the past 12 months, I believe that we have overcome many hurdles and this would not have been possible without the continuous commitment and support from all of our stakeholders, both internal and external.

I would like to first, express my gratitude to my fellow Board members for their continuous guidance and stewardship, ensuring that we stay on course as we navigate through this difficult period. I would also like to thank the management, staff of Perisai and advisors, for their unwavering support, loyalty and commitment in working towards achieving our goals collectively as a team.

My sincere appreciation to our client, Petroliam Nasional Berhad (“Petronas”) and PCSB for the continuing trust and confidence in Perisai, and we hope to be able to continue serving them in the


future. I would also like to express my gratitude to CDRC and our lenders, for their guidance and support throughout this difficult period.

Last but not least, to all of our stakeholders, my sincere gratitude for the trust and support, in our endeavor to restore Perisai as one of the established Malaysian oil & gas players.

Datuk Izzet IshakManaging Director


ABOUT THIS STATEMENT

SuSTAINABIlITy STATEMENT

Our first sustainability report

provides insights into the

contributions, challenges

and opportunities in

Economic, Environment

and Social (“EES”) areas

that are impacted by our

business and operation.

ScOPE GUIDELINE

FEEDBAcKREPORTING PERIOD

REPORTING cycLE

The coverage of this statement includes all operations of Perisai Petroleum Teknologi Bhd. (“Perisai”) and wholly owned subsidiaries that are directly controlled by Perisai through a majority stake. The report excludes joint ventures over which the company holds no direct responsibility.

The observed guidelines include Bursa Malaysia Sustainability Reporting Guide and a number of indicators from Global Reporting Initiative (“GRI”) G4 Oil and Gas Sector Disclosures.

The reporting period is from 1 July 2017 to 30 June 2018. Historical information from previous years is included to present clear comparative data. Quality, Health, Safety Environment and Security (“QHSES”) data are presented in calendar year from January to December.

The reporting cycle coincides with our Annual Report.

Please do not hesitate to contact us at for any comment regarding this report at:

PERISAI PETROLEUM TEKNOLOGI BHD.Suite 3A-17, Level 17Block 3A, Plaza SentralJalan Stesen Sentral 550470 Kuala LumpurMalaysiaEmail : [email protected]


sUstAinAbility stAtement

MATERIALITy

To determine the most material impacts of our business and operations in terms of EES aspects, we conducted our first materiality analysis, which was attended by the heads of departments and executive management. In keeping with the Bursa Guideline, we defined our most material issues in reference to our internal assessment of importance and to the views of our external stakeholders as regards the issues that affect their decisions pertaining to Perisai.

Materiality Analysis and Process

We identified our material sustainability concerns by undertaking the following steps:

Step 1Identification

Identification:

Identification of Material Issues o We created a comprehensive list of material concerns arising from the EES impacts of the Group’s

business operations and activities. o We categorised each issue according to the EES themes.o We prioritised issues by selecting the most important concerns.o We specified the rankings and importance of each issue.

Stakeholder Identification o Similar to the identification of material issues, we created a comprehensive list and classified each

stakeholder’s importance through rankings.

Step 2Stakeholder Input

Stakeholder Input: We analysed the stakeholders’ perspectives by reviewing our year-round engagement with them. Thereafter, we deliberated their understanding and standpoint regarding the identified sustainability matters.

Step 3Draft Materiality Matrix

Draft Materiality Matrix: We drafted the materiality matrix that considered the EES impacts and the influence of the stakeholders’ decisions.

Step 4Review and validation

Review and Validation: The result of the matrix was reviewed and validated by the management and the Managing Director.

Step 5Final Review and Approval

Final Review and Approval: The final matrix and the sustainability statement was reviewed and approved during the board meeting to confirm whether they are consistent with the Group’s strategy.



Materiality Matrix

The materiality analysis produced a list of priority issues that reflected the Group’s most significant impacts according to both internal and external stakeholders.

The Y-axis represents the issues that are material to our stakeholders and the X-axis signifies the important EES impacts of the Group. The Issues that appeared on the top right area of the matrix are deemed most significant by the Group and the stakeholders.

Important to Perisai

Imp

ort

ant

to t

he

Stak

eho

lder

s

Low

Me

diu

mH

igh

0% 20% 40% 60% 80% 100% 120%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

MATERIALITy MATRIx

Waste Disposal

Philanthrophic Activities

Energy Consumption

Work-life-Balance

Compensation & BenefitTraining & Career Enhancment

Supply Chain Management

Compliance & Ethics

Health & Safety

Service Quality

Spillage

Client Requirement & On Time Delivery

Local Employment

Low Medium High

We place high priority not only to Compliance and Ethics but also to Health and Safety (“H&S”), as our operations are highly influenced not only by the oil regulation laws and gas sector best practices but also by our customer PCSB, which has outlined strict H&S requirements in the supply chain. Three matters that are low in our priority are philanthropic activities, waste disposal and energy consumption. Although these are not high in our priorities, we carry out initiatives to reduce waste and electricity and continue supporting the existing charitable institution that we have been involved with for many years.

EcONOMIc

Compensation & Benefits

Local Employment

Supply Chain Management

Compliance & Ethics

ENvIRONMENT

Spillage

Waste Disposal

Energy Consumption

SOcIAL

Service Quality

Client Requirement & On time

Delivery

Health & Safety

Work-life Balance

Training & Career Enhancement

Philanthropic Activities


Stakeholder concerns Response

customer Quality, Health, Safety, Environment and Security

- Established the QHSES framework - Monitor the contractors’ QHSES- Regular review and update of QHSES

Investor Precise and Timely Information - Timely announcement of material events/developments- Update of information on website- Responding to queries via emails/on calls

community Local Employment - Transfer of knowledge to the local people- Local employment

Suppliers/contractors

Ethical Purchasing Quality Information

- Code of Conduct and Whistleblowing Policy- Bid tender information and meetings

Employees Health and Safety - Implement a strict health and safety framework- Monitor and review health and safety issues- Enhance work–life balance

Government Compliance - Compliance training for relevant employees- Update employees regarding new regulations- Renewal of relevant license

Stakeholder Engagement

Stakeholder engagement allows us to better understand what issues are considered important by our stakeholders. This knowledge, in turn, aids our strategies and planning.

The table below lists the stakeholder concerns and the responses we have undertaken for the year under review.

MANAGEMENT APPROAcH TO SUSTAINABILITy

Sustainability Policy

For Perisai, sustainability means carrying out our business in a socially responsible and holistic manner with the goal of enhancing investor perception and public trust. Underpinning sustainability in our business includes focus and attention on the following:

• Socialawarenessandbetterments;• Environmentalpreservation;and• Soundandeffectivecorporategovernance.

All of these factors are undertaken in a balanced manner between the interests of various stakeholders.

Sustainability Governance

We are committed towards adhering to the prescribed laws and regulations, but our ultimate goal is to go well beyond the minimum legislation requirement. Our Board plays a vital role


in steering our company towards a sustainable future and is the highest governing body of our sustainability direction. Led by our Managing Director, the Perisai management team manages the sustainability issues. Our QHSES team conducts due diligence and risk assessment, and they are also in charge of making prevention and intervention plans.

Our Code of Conduct incorporates policies against corruption, anti-discrimination, health and safety, and environmental protection, amongst others. Our Whistleblowing Policy provides a platform on which all employees and the general public can report any improper conduct.

Our risk management and internal control covers sustainable issues relating to Human Capital Management and Emergency Response Plan.


Sustainability Management

QHSES committee Structure

We recognize that we operate in an inherently dangerous working environment. For this reason, incidents and accidents are recorded and tracked by corrective action and tracking records (“CATR”). The management reviews and follows up on the investigation results of near-accidents. In addition, our QHSES committee conducts monthly reviews to monitor our progress and facilitate continuous improvement.

PERISAI DRILLING - QHSES cOMMITTEE ORGANISATION cHART

chief Operating Officer

EMPLOyERREPRESENTATIvE

EMPLOyEE REPRESENTATIvE

Rig ManagerAsset Integrity Management

Operations Support Manager

Finance

SEcRETARy1. QHSES Manager

2. QHSES Senior Engineer


QHSES Drilling Management Standard

The Perisai drilling QHSES Management Standard consists of 21 elements specific to our drilling activities and operations, as shown in the figure on the left.

REALISATION AND PRESERVATION

OF SERVICES

SECURITY

NONCONFORMITY, INCIDENT INVESTIGATION, PREVENTITIV

E AND

CO

RREC

TIO

N A

CTIO

N

POLICY, LEADERSHIP & ACCOUNTABILITY

PLAN

NIN

G, G

OALS AND TARGETS

DOCUMENT CONTROL AND RECORDS MANAGEMENT

OCCUPATI

ONAL

HEA

LTH

AN

D S

AFE

TYCO

MM

UNICATIO

N, PARTICIPATION & CONSULTATION SUPPLIER AND CONTRACTOR MANAGEM

ENT

AUDITING

ENVIRONMENT PROTECTION AND CO

NSERVATIO

NSTAKEH

OLD

ER AND CUSTOMERS

RISK

MAN

AGEM

ENT

SELE

CTIO

N, T

RAIN

ING, C

OMPETENCE & PEOPLE DEVELOPMENT

ORGANISATIONAL RESOURCES, RESPONSIBILITIES AND ACCOUNTABILITIES

LEGAL & OTH

ER MAN

DATO

RY REQU

IREMEN

TS

MANAGEMENT REVIEW

EMERGENCY PREPAREDNESS & RESPONSE

PRO

CESS

CO

NTR

OL

AND

OPE

RATI

ONS

ASSET INTEGRITY & RELIABILITY

MEASURING, M

ONITORIN

G AND

ANAL

YSIS

CORE VALUESSAFETY

ACCOUNTABILITYSUSTAINABILITY

INTEGRITY



2018 Key QHSES Plans

2018 KEy QHSES PLANS

• Total Recordable Injury Case Frequency Rate (“TRCF”) of <0.5• To maintain Loss Time Incident Frequency rate (“LTIF”) <0.30• Ensure personnel attend 100% of the mandatory training

sessions specified in the Training Matrix • Maintain Rig’s Non-Productivity Time (“NPT”) of <2%

We developed four quantitative 2018 QHSES Plans to measure our performance. These plans are our commitment to strengthen our QHSES culture and require the action and dedication from all our employees.

Monitoring

Our QHSES team regularly monitors the operation performance in accordance with the QHSES Management Standard. Performance monitoring and improvement are focused on the following areas:• Chemical,healthandriskassessment(“CHRA”)• Urine,drugandalcoholtesting• Potablewatertesting• Pre-embarkationhealthchecks

• Foodandhygieneinspection• Medicineinventoryandhospitalequipmentpreventive

maintenance• Preventive maintenance of fire and gas detection

systems, firefighting systems and life-saving appliances (“LSA”)

We also monitor the activities of our workforce as part of our Health and Safety Management through daily Personnel on Board reports, daily International Association of Drilling Contractors (“IADC”) reports as well as daily, weekly and monthly QHSES reports. This ensures that safety and health practices are applied in the daily operation of the company.

Security

We place high priority in managing security risks to ensure that our employees, properties and the environment are not threatened by any harm. We adopted and strictly implemented a security management manual and a rig security plan in our operations to ensure that Perisai’s assets are not vulnerable to security threats, thereby reducing the losses caused by terrorism, piracy and other criminal activities. We also closely coordinate with the office building management security as regards our safety around office premises and our offshore wellsite securities, which are provided by our clients.

QHSES Management System

Perisai’s QHSES Management System is structured on an integrated framework comprising the Quality, Health, Safety, Environmental and Security requirements of the ISO 9001 (Q), OHSAS 18001 (“OH&S”) ISM/MODU CODE (S), ISO 14001 (E) and Maritime Security - ISPS Code (S) standards, respectively.

Quality Health Safety Environment Security

Ensuring that the Company

meets the needs of clients and

continually improves

the level of satisfaction provided to customers

during service delivery.

Promoting and improving the health of employees.

Ensuring that safety

values are not compromised,

personnel are protected

and that a safe working

environment is provided where people can work

without being injured.

Promoting the efficient use of resources, reducing and

preventing pollution and

enhancing biodiversity protection.

Prevention of harm to and protection of

personnel, physical and

financial assets and intellectual

property.


SOcIAL: cUSTOMER

Our constant support and partner to excel in sustainability matters are our customers. Aligned with customer requirements, we have streamlined processes to improve sustainability and aspirer to exceed their expectation. We have established policies, manuals, procedures, forms and checklists that apply to the rig operation, and these are reviewed regularly to comply with the customer specifications.

Our regular engagement with customers allows us to achieve operational excellence and improve our best practices in the oil and gas industry. In turn, our learning experience from our customers is handed down to our own supply chain, thereby institutionalising and benefiting our value chain.

Data Protection

We strictly comply with the Personal Data Protection Act of Malaysia. As such, internal control systems are enforced to limit access to such information. We implement administrative security protocols to avoid any accidental loss of data and prevent the attempts of ill-willed parties to deliberately obtain such confidential information.

SOcIAL: PURcHASING

At Perisai, adherence to an uncompromising level of integrity is embodied in our Code of Conduct (“COC”), Procurement Standards and Procurement Procedures & Processes. Each employee in the supply division is responsible for ensuring that everyone is abiding by the letter and the spirit of our COC and Procurement Practices. Gifts, gratuities, entertainment, payments and bribery are clearly defined. In addition, our Whistleblowing Policy is enforced and consistently communicated to employees, suppliers and contractors.

Our customers’ demand for QHSES value drives us to excel.

Perisai will only conduct business with vendors who consistently satisfy statutory and regulatory requirements. Preference is given to vendors with ISO and OHSAS 18001 certifications. To ensure compliance with the Procurement Standards and Procurement Procedures & Processes, Perisai established the Tender Committee (“TC”), which is composed of all heads of departments. Technical Evaluation Report (“TER”) and Commercial Evaluation Report (“CER”) are submitted to the TC. TER is the technical and QHSES aspect, whereas CER is the financial obligation of both parties towards fulfilling the contract.

To ensure that vendors are adhering to the required standard, Vendor Performance Evaluation is carried out twice yearly. QHSES is one of the key aspects of the evaluation. The TC will review each vendor’s performance and take corrective actions on vendors who do not perform according to the QHSES and other obligations.

SOcIAL: EMPLOyEES

compliance with Laws And Regulation

We comply with the Occupational Safety and Health Act (“OSHA”) 1994, the Factory Machinery Act (“FMA”) 1967 and the Petroleum Act 1984. We also conform to our client’s requirements, such as the Petronas Technical Standard (“PTS”) and their Mandatory Control Framework (“MCF”), which includes the following:

• Capability• Health• Safety&Transportation• ProcessSafety&AssetIntegrity• SafeOperation• ContractorHSEManagement• IncidentManagementandEmergencyResponse

Safety Record

Employees and contractors are encouraged to participate in the Perisai Act System, where safety matters are keenly discussed. The strict implementation and continuous education on our safety programs has paid off.

Our performance is shown according to calendar year 1 January to 31 December.

Ethical Purchasing Practices.

Ensuring full compliance to the highest standards of health and safety within our

operations and workplace.



In the calendar year ended 31 December 2017:

lowest recorded

near-missed cases

highest recorded

number of days

without lost time

injuries (“LTI”) at 982

maintained no

fatalities in all

our operations

maintained zero

LTIF in our Malaysian

operations

TRCF reduced to 0.63

0.63

total of 56 Health

& Safety training

days

competence Training

Perisai is committed to uphold sustainable health and safety practices in the workplace. To foster QHSES competence, aside from legally required and QHSES induction trainings, we implement tailored training programmes based on three topics listed below.

Mandatory : Based on client requirement and the International Association of Drilling Contractors (“IADC”)Regulatory : Based on OSHA Occupational Safety and Health, Act 1994, Factories and Machineries Act 1967, Petroleum Act 1984, DCA Dept of Civil AviationRecommended Training : Based on Job Scope

We support our employees who make meaningful contributions to their team and to the company in to have lasting and fulfilling careers. Various training programs are offered to our employees to ensure their career growth and help them reach their full potential. In Perisai, we aim to create an encouraging working environment where employees can grow and excel at their best.

Talent Management



HELIDECK TRAINING

- Emergency Response Team Member- Helideck Assistant Initial Training- Helideck Radio Operator Training

9daysTraining Days

23peopleNumber of Attendees


INDUCTION TRAINING

HSE Induction training for new employees

As RequiredTraining Days

All new employeesNumber of Attendees

EMERGENCY TRAINING

- Basic Offshore Safety Induction and Emergency Training - Managing Major Emergency

7daysTraining Days


MEDICAL TRAINING ADVANCE FIRST AID COURSE

- Advance First Aid Course- Advance Life Support- Advance Trauma Life support

9daysTraining Days


SURVIVAL TRAINING

- Proficiency in Survival Craft and Rescue Boats

- Personal Survival Techniques (STCW-PST)- Confined Space Entry

5daysTraining Days


20daysTraining Days


SAFETY OPERATION TRAINING

- Crane Operator- Forklift Operator- Banksman and Slinger Training- Authorised Gas Tester (AGT)- Stuck Pipe Training- Ballast Control & Stability Training

BALLAST CONTROL & STABILITY TRAINING

To demonstrate competence of Ballast Control Operator during rig operation

5daysTraining Days


BASIC FOOD HANDLING

To give employees awareness and knowledge on food safety program

1daysTraining Days


From 1 January 2018 until 30 June 2018,

our employees have completed 85% of

mandatory and regulatory training.



Spill Response Plan

Our oil spill contingency response contains numerous details, including exercise and equipment testing procedures, spill response strategies and tactics, spill command and control procedures, and emergency contact information. All of these plans are documented according to:

1) D-HSE-209 Emergency Response Plan (Offshore), Section 17, Chemical Spill

2) PP 101 SOPEP (Ship Oil Pollution and Environmental Protection)

3) PP101 HSE Case. PDR-PP101-HSE-07-A1, Part 5 Emergency Response, Oil/Chemical Spill and Marine Pollution

On 12 January 2018, our readiness strategies were tested during the fabrication of a bottom hole assembly

(“BHA”). When the dolly retract system was activated to move the tool string out of the crew’s way for them to

work on another BHA component, hydraulic oil mist started spraying out of a hose on the top drive system. The

on-site crew took immediate action guided by established SOP and successfully prevented any hydraulic oil spill

onto the ground.

Quarterly Spill Drill

Although preventing oil spills is our ultimate goal, we place equal importance in developing the capability to respond to spills. To prepare our first responders, Perisai conducts Environmental Spill Drills regularly in all our sites. Spill containment is the first response taken for any spill on water. Therefore, all first responders must undergo proper training for deploying spill equipment and responding efficiently to mitigate the minimum impact of an oil spill on water. After the drill, a review is conducted to assess the actions, response time, communication, teamwork procedures and equipment and to survey recommendations for improvements.

workforce Diversity

We cultivate a workforce with diverse thoughts, knowledge, skills and culture across our company, which facilitates innovation and high-quality work. We believe that regardless of age, gender, ethnicity or family status, our employees can make notable contributions based on their talent, experience and expertise.


FemaleMale

BREAKDOwN By POSITIONS

Non-ExecutivesManagers Executives

96%

4%

71%

29%

64%

36%

96%

4%

72%

28%

72%

28%

2018 20172018 2017 2018 2017


GENDER RATIO

21% 18%

79% 82%

FemaleMale

Women accounts for 21% of the workforce, with 6 women personnel hold managerial positions as of the financial year ended 2018.

AGE GROUP OF EMPLOyEES

20-30 years old

12%

20-30 years old

6%

31-40 years old

46%

31-40 years old

48%

41-and above years old

42%

41-and above years old

46%

2018 2017

2018 2017


Employee Movements

FINANCIAL YEAR (“FY”) 2017** 2018

Number of New Hire 105 43

Number of Resignation 168* 77

* Due to FPSO project completion.** FY17 covers a period of 18 mths frm 1 January 2016 until

30 June 2017.

Employee Engagement

Performance Review

We conduct annual performance appraisals to improve the employees’ potential and development. We utilize the Competency Assurance Management System (“CAMS”), which is a tool that evaluates crew performance and improvement. Our employees are also provided with online tools called Perisai e-portal for managing their individual records. This HR tool assist all employees in planning designs for their daily tasks.

During the financial year under review, we promoted four (4) offshore employees and four (4) onshore employees.

Social Gathering

We foster rest, recreation and holiday celebrations.

MALAySIAN & OTHER NATIONALITIES

Malaysian

94%Malaysian

93%

OtherNationalities

6%

OtherNationalities

7%


Gawai Festival Hari Raya

20172018

work–Life Balance

We strive to create a positive working environment where employees can work with vigour, confidence and enthusiasm. To strengthen our employees’ loyalty and productivity, we have implemented work–life balance measures for our employees as shown below:

Onshore• Flexibleworkinghours• Reduced working hours for Muslim employees during

Ramadan• Offshore allowance and replacement leaves are given

for each day worked for onshore employees who are assigned for offshore assignments on weekends and public holidays

Offshore• Gymfacilities• Sundaybarbeques

* Direct hire only


Benefits and compensation

Our compensation package is composed of compulsory and non-compulsory benefits.

Non-compulsory benefits include provision of meal allowances, offshore allowances (for onshore employees), prolonged illness leaves, paternity leaves, marriage leaves, compassionate leaves, Hajj leaves, exam leaves, leaves of absence, replacement for work on off days, rest days and public holidays, and unpaid leaves.

SOcIAL: cOMMUNITy

Local Employment


Philanthropic Activities

Perisai’s philanthropic contribution is based on collaborative effort with the MyKasih Foundation. In partnership with the MyKasih Foundation, we have consistently provided financial aid to

60 low-income families in Kemaman, Terengganu since 2014.

This programme assists in the financial commitments of underserved families through monthly contributions channelled as credits to participating outlets. Selected families can choose different brands of essential food items from an approved list of ten (10) product categories, such as rice, cooking oil, beverages, biscuits, eggs, flour, seasoning, canned foods, noodles and bread.

ENvIRONMENT

Perisai supports the exploration, development and production phases of offshore oil and gas fields both in and out of Malaysia. Aligned with our operations and aiding the preservation of marine life throughout the world’s oceans and seas, we rigorously implement initiatives to maintain a cleaner marine environment. Our operations comply with the International Convention for the Prevention of Pollution from Ships (“MARPOL 1973”), the Environment Quality Act 1974 and the Petroleum Act 1984.

waste Recording

In addition to the MARPOL log book for waste oil, we have a scheduled waste log

book and notification for scheduled waste disposal.

Hazard Hunting

Identify potential environmental hazards

and assess whether previous identified risks have been completely

managed.

Incident Reporting

On-site personnel must report any incident of pollution regardless of

extent.

Audit

Identify environmental compliance and

implementation gaps, as well as relevant corrective

measures.

Investigation

All incidents are investigated to prevent

reoccurrence.

Knowledge Transfer from Expatriates to Local.

Our aim is to develop a high-performing workforce particularly through the development of local potential.

In the era of globalisation, effective knowledge transfer among expatriates and Malaysian workers is imperative to ensure that oil and gas companies can compete with organisations worldwide.

We are continually expanding our Malaysianisation programme, where we train and develop local talents and appoint them to positions previously filled by expatriates. We recognize the importance of local competencies in the success of our operation. Both local and expatriate employees perceive positive learning culture as one of the most important factors affecting knowledge transfer. Expatriates serve as bridges for the transfer of knowledge, and our training programmes are conducted formally and informally through a mentor–mentee programme.

Strive to Minimise Environmental Impacts.



waste Management

Responsible waste management begins with pollution prevention. To this end, we strive towards waste minimisation by identifying opportunities for preventing and reducing waste generation.

Sewage treatment: We take utmost care or our discharges, and we ensure that we comply with all regulations the discharging of sewage. Sewage on the sea is generally the waste produced from toilets, urinals, and WC scuppers. All of our assets (except the mobile offshore production unit) (“MOPU”) are installed with sewage treatment plants. Our sewage is discharged into the seawater only after it is treated, and the distance of the ship is four nautical miles from the nearest land.

Oily Water Separator: Our rig and production assets separate oil from bilge water to the required international standard of oil content before discharging overboard.

Waste Segregation and Recycling: Although we practice waste segregation in both our vessel and rigs, our recycling is conducted by a waste contractor when we send our waste onshore.

water and Energy consumption

Alternative water supply is our response to the onshore fresh water supply and Perisai’s assets (except MOPU) are installed with a water maker (Reverse Osmosis Systems). Creating awareness on water and energy consumption is an on-going effort and we incorporate these practices in our daily operations and house rules for all to observe.

Note 1: Drilling Mud and Rock Cuttings are under the jurisdiction of our customers.

wASTE MANAGEMENT

wATER cONSUMPTION ENERGy cONSUMPTION

20172018(6 months)

Non-hazardous waste

180.15/MT

2017

3,645/MT

Non-hazardous waste

44.95/MT

2017

9,275/MT

Hazardous Waste

69.44/MT

2018 (6 months)

2,156/MT

Hazardous Waste

39.44/MT

2018 (6 months)

5,335/MT

20172018 20172018


CorporAte goVernAnCeoVerVIew stAtement

Perisai Petroleum Teknologi Bhd (“Perisai” or “the company”) has triggered the prescribed criteria pursuant to Paragraph 8.04 and Paragraph 2.1 (f) of Practice Note 17 (“PN17”) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and was admitted into PN17 on 13 October 2016. On 1 August 2018, the company had submitted the application in relation to the proposed regularisation plan (“Proposed Regularisation Plan”) to Bursa Securities for approval.

While the Board of Directors (“the Board”) of the Company assisted by the advisors have been actively involved in the formulation of a Proposed Regularisation Plan for the Company pursuant to PN17, the Board acknowledges the importance of good corporate governance and is committed to ensuring the sustainability of the Company’s businesses and operations through maintaining good governance ethics as promulgated by the Malaysian Code on Corporate Governance 2017 (“MCCG”). The Board believes that maintaining good corporate governance is essential to delivering stakeholders’ value.

In making this Corporate Governance Overview Statement, the Company is guided by Practice Note 9 of MMLR of Bursa Securities and the Corporate Governance Guide (3rd edition) issued by Bursa Securities. This Corporate Governance Overview Statement is supported with a Corporate Governance Report, based on a prescribed format as outlined in paragraph 15.25(2) of the MMLR so as to map the application of the Company’s corporate governance practices against the MCCG. The Corporate Governance Report is available on the Company’s website, www.perisai.biz as well as via an announcement on the website of Bursa Securities.

The Corporate Governance Report provides the details on how the Company has applied each Practice as set out in the MCCG during the financial year 2018.

cOMPLIANcE wITH THE MccG

As a Main Market listed company, the Company is pleased to present this statement in accordance with the MCCG which sets out the standards of good practice in relation to:

a) Principle A:BoardLeadershipandEffectiveness;b) Principle B:EffectiveAuditandRiskManagement;andc) Principle c: Integrity in Corporate Reporting and Meaningful Relationship with stakeholders.

This Statement outlines the principles and recommendations which the Company has adopted and applied, and where there are gaps in the Company’s observation of any of the recommendations, they were disclosed herein with explanations.

PRINcIPLE A: BOARD LEADERSHIP AND EFFEcTIvENESS

1. Board Roles and Responsibilities

The Company is led by an experienced and dynamic Board. It has a balanced board composition with effective independent directors. The Board plays a pivotal role in the stewardship of the Group and ultimately enhancing shareholders’ value. To fulfill this role, the Board assumes the duties and responsibilities as set out in the Board Charter.

2. chairman and Managing Director/Executive Director

There is clear division of responsibilities between the Chairman and Managing Director (“MD”) to ensure that there is balance of power and authority, as set out in the Board Charter.

The Independent Non-Executive Chairman, Dato’ Anwarrudin Bin Ahamad Osman is responsible for the leaderships, effectiveness, conduct and governance of the Board as well as setting the Board agenda including ensuring accurate and complete Board papers are provided to Board members and Committees in advance. The Chairman encourages active participation among the Directors. During the meetings, the Chairman shared his views on key matters so that all the


corporate governance overview statement

Directors contribute to the debates while overseeing no director dominates the discussions. The Chairman maintains regular contacts with all Directors. Where appropriate, the Chairman invites Director(s) to attend meetings with the Management on key matters of business. The Chairman and/or the MD also communicate on behalf of the Company to shareholders and other stakeholders.

The MD, Datuk Zainol Izzet Bin Mohamed Ishak, is entrusted by the Board on the daily running of the business and implementation of the Group’s policies and strategic plans established by the Board within a set of authorities delegated by the Board. The MD also leads the Management to ensure effective working relationship with the Chairman and the Board by meeting or communicating with the Chairman/Director(s) on regular basis to review key developments and issues.

3. Company Secretary

Company Secretary plays an important role in advising and supporting the Board. The Company Secretaries have more than twenty (20) years’ experiences in practice and are qualified under The Malaysian Institute of Chartered Secretaries and Administrators.

The Company Secretary is responsible for the following: • AdvisingtheBoardonthegovernancemattersandkeepingtheBoardabreastwiththedevelopmentsofcorporateand

securities law, listing rules, Company’s Constitution, Board policies and procedures, and its compliance with regulatory requirements, and advocate adoption of corporate governance best practices;

• ManagingtheprovisionofinformationwithintheBoard;and• FacilitatingtheinductionofnewdirectorsandcontinuingdevelopmentofDirectors.

The Board has direct access to the advice and services of the Company Secretary who is responsible to the Board for ensuring that all governance matters and Board procedures are in compliance with the applicable laws and regulations. This includes updating the Board on the Listing Requirements, circulars from Bursa Securities and other legal and regulatory developments and their impact on the Group and its business.

The Company Secretaries attend all Board and Committee meetings and ensure that meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly.

Deliberations during the Board and Board Committees meetings were property minuted and documented by the Company Secretaries. Upon conclusion of the meetings, minutes are circulated to all the Board members to ensure that the minutes reflect accurate records of the deliberations and decisions at the meetings.

4. Information and Support for Directors

The Company Secretaries manage the information flows to the Board at appropriate times in consultation with the Chairman and the MD.

The Board is supplied with relevant information and reports on financial, operational, corporate, regulatory, business development and audit matters, by way of Board papers or upon specific requests, for informed decision making and effective discharge of the Board’s responsibilities.

The Board meets at least once quarterly to review and approve the quarterly results of the Group for announcement. The Board also attended quite a number of additional meetings on ad-hoc basis as and when necessary to discuss corporate proposals or business issues that require the urgent decisions of the Board. Advisors and Senior Management staff were invited to attend the Board meetings where necessary to provide the Board with detailed explanations and clarifications on issues that are being considered during the Board meetings.


The notices of Board of Directors’ meetings were given in writing at least seven (7) days prior to the meeting. The Board’s deliberation, in terms of the pertinent issues discussed at the meetings in arriving at the decisions and conclusions thereof in discharging the Board’s duties and responsibilities are properly recorded by the Company Secretaries. Board papers and agenda items were circulated within a reasonable due notice prior to the meeting or such other period as deemed appropriate by the Board.

The Directors may seek advice from the Management on issues pertaining to their respective jurisdictions. The Directors may also interact directly with, or request further explanation, information or updates on any aspect of the Company’s operations or business concerns from the Management.

As the Group’s quarterly results is one of the regular annual schedule matters which is tabled to the Board for approval at the quarterly Board Meetings, memorandum on closed period for trading in the Company’s securities are circulated to Directors, principal officers and employees who are deemed to be privy to any price-sensitive information in advance whenever the close period is applicable based on the targeted date of announcement of the Group’s quarterly results.

The Board has access to the advice and services of the Company Secretaries, who are experienced and capable of carrying out the duties to which the post entails and may upon a written request to the Chairman to obtain independent professional advice at the Company’s expense as and when necessary.

5. Clear functions of the Board and Management

The Group acknowledges the pivotal role played by the Board in the stewardship of its directions and operations, and ultimately the enhancement of long-term shareholders’ value. To fulfill this role, the Board is responsible for the overall corporate governance of the Group, including its strategic direction, establishing goals for management and monitoring the achievement of these goals.

The Board is guided by a Board Charter which sets out the duties and responsibilities of the Board, the Board Committees, and the Management, matters reserved for the Board’s decision and those which the Board may delegate to the Board Committees, MD and Management. The Board Charter further defines the respective roles of the Chairman of the Board, MD, Senior Independent Non-Executive Director and Directors. The Board Charter is available for reference at the Company’s website at www.perisai.biz.

The Board Charter has been revised and approved in 2018 to promote high standards of corporate governance and is designed to provide guidance and clarity for Directors and Management with regard to the role of the Board and its Committees. The Board Charter does not overrule or pre-empt the statutory requirements and other relevant statutes.

The Board will review this Charter from time to time and make necessary amendments as and when necessary to ensure it remains consistent with its objectives and existing regulatory requirements.

6. Board Committees

The Board, comprising members with diverse skills, experience and qualifications, recognises the clear distinction of the roles and responsibilities between the Board and the Management. The Board is responsible for the overall strategic direction and leadership of the Group, the adequacy and effectiveness of the Group’s risk management and internal control system, and compliance with the relevant laws and regulations. The Management, on the other hand, is responsible for assisting the Board in implementing the policies and procedures adopted by the Board to achieve the Group’s objective and in running the Group’s day-to-day business operation.



To assist in the discharge of its responsibilities, the Board has established the following Board Committees to perform certain of its functions and to provide recommendations and advice:

• AuditCommittee(“AC”)• NominationCommittee(“NC”)• RemunerationCommittee(“RC”);and• Employees’ShareOptionScheme(“ESOS”)

The following diagram shows a brief overview of the four main Board Committees of the Company, each of which is explained in further details as below:

ESOS Committee

Board of Directors

Nomination Committee

Responsibilities

• Boardsizeandcomposition

• Selection&recruitmentof directors

• Boardperformanceevaluation

• Committeeperformance evaluation

• Directors’training

Remuneration Committee

Responsibilities

• Remunerationpolicy

• Directors’feesandbenefits

• Performancerelatedpayschemes

Audit Committee

Responsibilities

• Internalaudit

• Externalaudit

• Riskmanagement

• Financialreporting

• Auditreports

• Relatedpartytransactions

• Internalcontrols

• Conflictofinterest

Responsibilities

• Determining eligibility undertheESOSScheme

• Determinenumberofshares offered

• Determineandregulateprocedures on issuance and exercise of option

• Listentodisputesraised

Each Committee operates its functions within their approved terms of reference by the Board which are reviewed by the Board from time to time and the Board appoints the Chairman and members of each Committee.

The respective Committees report to the Board on matters considered and their recommendations thereon. The ultimate responsibility for the final decision on all matters, however, lies with the Board.

The Board may form other Committees delegated with specific authorities to act on their behalf. These Committees operate under approved terms of reference or guidelines, whenever required.

All Board Committees have written terms of reference which were approved by the Board. The respective Chairman of the AC, NC and RC report their proceedings to the Board accordingly subsequent to the respective Committee meetings.

Authority for the operational management of the Group’s business has been delegated to the MD. The MD further delegates its day to day operations to the Management. The Management of each department within its authority limits reports directly to the Managing Director.

The Terms of Reference of the Board Committees have been revised and approved in 2018 and are published on the Company’s website at www.perisai.biz.

A brief description of each Director is presented in the profile of Directors on pages 8 to 12 of this Annual Report.



7. Code of Conduct and Ethics

TheBoardhasformalisedandadoptedaCodeofConductandEthics(“COCE”)whichsetsoutcertainvalues,principlesandstandardsofgoodconductexpectedfromtheDirectorsandemployeesatwork.AcopyoftheCOCEcanbeviewedattheCompany’swebsite.TheCOCEwillbereviewedfromtimetotimeforchangesandnewdevelopmentsintheexternalandinternal environment.

ThisCOCEhasbeenrevisedandapproved in2018topromotethecorporateculturewhichengendersethicalconductthatpermeatesthroughouttheCompanyandits’subsidiaries.TheCOCEreflectstheCompany’scommitmenttointegrity,transparency, accountability and self-regulation.

The detailed information can be found in the Company’s website at www.perisai.biz.

8. Sustainability

The Board recognises the importance of sustainability and its increasing significance in the business. The Board is committed to understanding and implementing sustainable practices and to exploring the benefits to the business whilst attempting to achieve the right balance between the needs of the wider community, the requirements of shareholders and stakeholders and economic success.

The Company has formalised a Sustainability Statement which aims to integrate the principles of sustainability into the Company’s strategies, policies and procedures as well as practices. Senior Management is entrusted in implementing this process, with the direction and guidance from the Board. Sustainability efforts are reviewed and the Board and Senior Management are committed to create a culture of awareness on sustainability within the Company. The Sustainability Statement is set out on pages 26 to 39 of the Annual Report 2018.

9. Board Composition

The composition of the Board is as follows:-

Chairman (Independent Non-Executive Chairman) Dato’AnwarrudinBinAhamadOsman

Managing Director Datuk Zainol Izzet Bin Mohamed Ishak

Independent Non-Executive Directors Dato’ Yogesvaran A/L T. Arianayagam D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRaja Tunku Soraya Almarhum Sultan Abdul Halim Mu’adzam Shah (resigned on 5 April 2018)

Non-Independent Non-Executive Directors Dato’ Dr. Mohamed Ariffin Bin Hj. Aton ChanFeoiChun Adarash Kumar A/L Chranji Lal Amarnath (resigned on 30 January 2018)

The profile of the Directors is set out on pages 8 to 12 of this Annual Report.

The composition of the Board has complied with the Listing Requirements of Bursa Securities which requires at least two Directors or one-third (1/3) of the Board members of the Company, whichever is higher, are independent.



With the current composition, the Board believes that its members have the necessary knowledge, experience, requisite range of skills and competence to enable them to discharge their duties and responsibilities effectively, objectively and independently as follows:-

i) The Board believes the current composition of directors is sufficient as they contribute to Board’s deliberations objectively and independently.

ii) There are robust deliberations during Board and Committee meetings as they do not shy away from asking hard questions or request more information where necessary.

iii) All Directors on the Board have gained extensive experience with their many years of experience on boards of other companies and/or also as professionals in their respective fields of expertise.

The Directors also bring external perspectives to the Board’s deliberations through their diverse backgrounds and experiences, enabling them to put in place necessary checks and balances, contributing to Board’s decision making.

The Board concluded that the members have appropriate background, experience, skills and knowledge to lead the Company.Furthermore,theBoardbelievesthatthecurrentcompositionisappropriate.Nevertheless,theBoard,throughthe NC, reviews the composition of the Board, continues to search for candidate(s) and core competencies of Directors.

The MCCG also recommends that if the Board intends to retain an Independent Director more than nine (9) years, the Board must justify and seek shareholders’ approval. If the Board continues to retain the Independent Director after the twelve years, the Board should seek annual shareholders’ approval through a two-tier voting process. Currently, none of the Independent Non-Executive Directors of the Company have exceeded the cumulative terms of nine years.

10. Nomination Committee

The composition of the NC is as follows:-

Chairman Dato’ Yogesvaran A/L T. Arianayagam (Independent Non-Executive Director)

Members Dato’AnwarrudinBinAhamadOsman (Independent Non-Executive Chairman) (Appointed on 5 April 2018) Dato’ Dr. Mohamed Ariffin Bin Hj. Aton (Non-Independent Non-Executive Director) D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRajaTunkuSoraya Almarhum Sultan Abdul Halim Mu’adzam Shah (Independent Non-Executive Director) (resigned on 5 April 2018)

The responsibilities of the NC in overseeing the selection and assessment of Directors are stipulated in its Term of Reference. The Terms of Reference of the NC is available for reference on the Company’s website at www.perisai.biz.

During the financial year under review, the NC met once and attended by two (2) of its Members. The NC undertook the following:

• Reviewed, considered and recommended to the Board for approval, the re-election of Directors who retire by rotation pursuant to Company’s Constitution;

• Reviewed and recommended to the Board for approval, the revised NC’s terms of reference in compliance with the latest amendments to the Listing Requirements and the MCCG;

• Assessed the independence of Independent Directors;• Evaluated the performance and effectiveness of the Board and each individual Director; and• Reviewed and assessed the AC’s activities, performance and terms of office of AC and each of the AC members.



In accordance with the Company’s Constitution, an election of Directors shall take place each year at an AGM and one-third (1/3) of the Directors are subject to retirement by rotation, in any event, each Director shall retire from office once in every three (3) years. The Directors to retire in each year are the Directors who have been longest in office since their last appointment or re-election. The Directors appointed by the Board during the financial year are subject to retirement at the next AGM held following their appointments in accordance with the Company’s Constitution. All retiring Directors are eligible for re-election. The re-election of each Director is voted on separate resolution during the AGM of the Company.

Based on the schedule of rotation, the following Directors are subject to retirement by rotation pursuant to the Company’s Constitution at the forthcoming 15th AGM:-

Dato’AnwarrudinBinAhamadOsman(Article93) Datuk Zainol Izzet Bin Mohamed Ishak (Article 93)

The aforesaid Directors have expressed their intention to seek for re-election at the forthcoming AGM.

11. Appointments to the Board The NC reviews the Board Composition, AC and NC to ensure that the Board and the individual Directors have the range of

skills, experience, independence, competence and diversity to adhere the sustainability of the Group and good corporate governance practice.

The NC is also responsible for assessing the nominees and making recommendations for new appointments to the Board considering the following:

• Skills,knowledge,expertiseandexperience;• Professionalism;• Boardroomdiversity(includinggenderdiversity);• Background,Character,competence,timecommitmentandintegrity;and

in identifying candidates for appointment of Directors, the Board relies on recommendations from NC, existing Board

members, Management or major shareholders. The Board may consider seeking independent sources (e.g. directors’ registry, advertisement or recruitment agency) to identify suitably qualified candidates from the independent sources in addition from the Directors, Management or major Shareholders of the Company, when necessary.

12. Diversity Policy

The Board is committed to provide fair and equal opportunities and to nurture diversity (including gender, age and ethnicity) within the Group. The candidates for future Board appointments will be considered, taking into account, a range of diversity perspectives, including gender, cultural, competency, skills, character, time commitment, integrity and experience of which the selected candidates will bring to the Board. The actual decision as to who should be nominated will be the responsibility of the full Board after considering the recommendations of the NC. The Company Secretaries will ensure that all appointments are properly made; all the necessary information is obtained as well as all legal and regulatory obligations are met.

Diversity plays an important aspect in ensuring more efficient decision makings for the Board. This is clear from the Board’s diverse skill sets, backgrounds, experience as well as differences in cultural and gender. With the current composition, the Board believes that its members have the necessary knowledge, experience, requisite range of skills and competence to enable them to discharge their duties and responsibilities effectively. All Directors on the Board have gained extensive experience with their many years of experience on Boards of other companies and/or also as professionals in their respective fields of expertise, such as architecture, project management, engineering, finance, accounting, human resource, marketing and sales.



Duringtheyearunderreview,theBoardhasonefemaleIndependentNon-ExecutiveDirector,i.e.D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRajaTunkuSorayaAlmarhumSultanAbdulHalimMu’adzamShah(“D.Y.A.MTunkuSoraya”)representing 16.67% of the total Board members. D.Y.A.M Tunku Soraya had resigned as Director on 5 April 2018 and following herresignation,shehasalsoceasedtobemembersof theNominationCommittee (“NC”)andESOSCommitteeand inreplacementthereof,Dato’AnwarrudinBinAhamadOsman,theIndependentNon-ExecutiveChairmanoftheCompanyhas been appointed as Member of the NC of the Company. The NC will take steps to include, where appropriate, women candidates as part of the Board’s recruitment exercise.

TheBoardwillreportannuallyintheAnnualReportonBoard’sdiversityandmonitortheimplementationofthisPolicy.

13. Board Evaluation

The NC is responsible for carrying out assessment of the performance and effectiveness of the Board as a whole, its committee and based on self-review and peer assessment on an annual basis. The annual assessment includes specific assessment of independence of Independent Directors.

An evaluation form to assess the performance of the Board, its committees and the individual directors is provided with the aim of improving the effectiveness of the Board and its members. The evaluation forms were drafted based on the recommended form prescribed by Bursa Securities and MCCG that relates to the Board structure, operations, roles and responsibilities, Board composition and assessment of character, experience, integrity, competence and time commitment of each Directors. The review was led by the NC Chairman.

Forthefinancialyearunderreview2018,theBoard’sevaluationswasconductedbyNCandledbytheNCChairman,andobservedbytwooftheNCmembers,Dato’AnwarrudinBinAhamadOsmanandDato’Dr.MohamedAriffinBinHj.Aton.

The NC reviewed the results of the Board annual performance evaluation for the financial year under review and held a

meetingfordiscussiononsuchmatter.Followingthemeeting,theresultstogetherwiththerecommendationsarisingfromthe evaluations were discussed at the Board meeting.

Based on the results of the 2018 evaluation, the overall Directors’ view was that the Board was functioning effectively. Each of the Directors was found to have made contributions and commitments including time in their respective roles.

All Directors have complied with the restrictions on the number of directorships in public listed companies as prescribed under the Listing Requirements.

14. Time Commitment

During the financial year ended 30 June 2018, the Board met ten (10) times, with details of the attendance as follows:

Name of Directors No. of Board Meetings Attended

Dato’AnwarrudinBinAhamadOsman 10/10

Datuk Zainol Izzet Bin Mohamed Ishak 10/10

Dato’ Yogesvaran A/L T. Arianayagam 10/10

ChanFeoiChun 10/10

Dato’ Dr. Mohamed Ariffin Bin Hj. Aton 10/10

D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRajaTunkuSorayaAlmarhumSultan Abdul Halim Mu’adzam Shah

2/9(Resigned on 5 April 2018)

Adarash Kumar A/L Chranji Lal Amarnath 4/7(Resigned on 30 January 2018)



15. Board Training and Development

The Board, via the NC, assesses the training needs of each of its Directors on an ongoing basis, by determining areas that would best strengthen their contributions to the Board.

AlltheDirectorsoftheCompanyhaveattendedtheMandatoryAccreditationProgramme(“MAP”).NewDirectorswillbebriefed on the Company’s history, operations and financial control system to enable them to have in-depth understanding of the Company’s operations. The Senior Management had also briefed the Directors on general economic, industry and technical developments from time to time.

The Directors are encouraged to attend continuous education programme and seminars to keep abreast of relevant changes in laws and regulations and the development in the industry. During the financial year ended 30 June 2018, the training programmes and seminars attended by the Directors are as follows:-

Directors Programme Date

Dato’AnwarrudinBinAhamadOsman Malaysian Code on CorporateGovernance 2017

27February2018

Datuk Zainol Izzet Bin Mohamed Ishak Malaysian Code on CorporateGovernance 2017

27February2018

Dato’ Yogesvaran A/L T. Arianayagam Malaysian Code on CorporateGovernance 2017

27February2018

ChanFeoiChun Malaysian Code on CorporateGovernance 2017

27February2018

Dato’ Dr. Mohamed Ariffin Bin Hj. Aton Malaysian Code on Corporate Governance 2017

27February2018

D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRajaTunku Soraya Almarhum Sultan Abdul Halim Mu’adzam Shah (Resigned on 5 April 2018)

- -

Adarash Kumar A/L Chranji Lal Amarnath (Resigned on 30 January 2018)

- -

The Directors will continue to attend relevant training courses to further enhance their skills and knowledge to enable them to discharge their responsibilities more effectively.

The Company Secretaries facilitate the organisation of internal training programmes and keep Directors informed of relevant external training programmes. The Company Secretaries also circulate the relevant guidelines on statutory and regulatory requirements from time to time for the Board’s reference and brief the Board on these updates at Board meetings.

16. Remuneration Committee and Remuneration Policies and Procedures

The objective of the Group is to ensure that the Group attracts and retains Directors and Senior Management of calibre to provide the necessary skills and experience as required and commensurate with the responsibilities for the effective management and operations of the Group. The Company has adopted a formalised policy in 2018 to determine the remuneration of Directors and Senior Management.



The composition of the RC is as follows:-

ChairmanChanFeoiChun(Non-Independent Non-Executive Director)

MembersDato’ Yogesvaran A/L T. Arianayagam (Independent Non-Executive Director)Dato’AnwarrudinBinAhamadOsman(Independent Non-Executive Chairman) (Appointed on 29 August 2018)

The duties and responsibilities of the RC are as follows:-

(a) To recommend to the Board the remuneration of the Executive Directors and Non-Executive Directors in all its forms. The determination of remuneration packages of Executive Directors and Non-Executive Directors, should be a matter for the Board as a whole where the individuals concerned shall abstain from discussion of their own remuneration;

(b) To assist the Board in assessing the responsibility and commitment undertaken by the Board membership; and

(c) To assist the Board in ensuring the remuneration of the directors reflects the responsibility and commitment of the director concerned.

During the financial year under review, the RC met once, of which all members attended.

The remuneration packages for the Executive Directors comprise of basic salary and benefits-in-kind. The basic salaries are reviewed annually taking into account a number of factors, including individual responsibilities, performance and experience, and practices at other companies of similar size. The Managing Director receives a Company’s car with full maintenance and fuel but without leave passage and car allowance.

Each of the Director receives directors’ fee and meeting allowances for each Board and general meetings that they attend.

The level of Directors’ fee reflects their experience and level of responsibilities. Chairman of the AC, RC, NC receives higher fees in respect of their services as Chairman of respective committee. The Directors will receive an additional fee if they are members of the Board Committees. The fees for Directors are determined by the Board with approval from shareholders at AGM.

In respect of the financial year under review, the RC had reviewed the remuneration for the Executive Directors, which reflects the level of risk, responsibility as well as the performance of the Company and considered the packages are well within the industry norm. The RC had also reviewed the fees and benefits-in-kinds (“BIK”) for ExecutiveDirectors andNon-Executive Directors, which reflects the experience and level of responsibilities undertaken by the individual Executive Directors and Non-Executive Director concerned.



Details of the remuneration of Directors (both the Company and the Group) who served during the financial year ended 30 June 2018 are as follows:-

The Group

Fees(RM)

Meeting Allowance

(RM)Salaries

(RM)

Share Options Granted

under ESOS(RM)

Benefits-in-kind

(RM)

Other Emoluments

(RM) Total (RM)

Executive Director

Datuk Zainol Izzet Bin Mohamed Ishak*

- - 1,020,162 113,760 28,788 178,317 1,341,027

Non-Executive Directors


84,560 12,500 - - - - 97,060


75,743 13,500 - - - - 89,243

ChanFeoiChun 70,957 13,000 - - - - 83,957


70,200 11,000 - - - - 81,200

Adarash Kumar A/L Chranji Lal Amarnath(Resigned on 30 January 2018)

36,411 4,000 - 59,608 - - 100,019

D.Y.A.MRajaPuanMudaPerakDarul Ridzuan Dato’ Seri DiRaja Tunku Soraya Almarhum Sultan Abdul Halim Mu’adzam Shah (Resigned on 5 April 2018)

50,690 2,000 - - - - 52,690



The Company

Fees(RM)

Meeting Allowance

(RM)Salaries

(RM)

Share Options Granted

under ESOS(RM)

Benefits-in-kind

(RM)

Other Emoluments

(RM) Total (RM)

Executive Director

Datuk Zainol Izzet Bin Mohamed Ishak*

- - 918,000 113,760 28,788 165,036 1,225,584

Non-Executive Directors


84,560 12,500 - - - - 97,060


75,743 13,500 - - - - 89,243

ChanFeoiChun 70,957 13,000 - - - - 83,957


70,200 11,000 - - - - 81,200

Adarash Kumar A/L Chranji Lal Amarnath (Resigned on 30 January 2018)

36,411 4,000 - 59,608 - - 100,019

D.Y.A.MRajaPuanMudaPerakDarulRidzuan Dato’ Seri DiRaja Tunku Soraya Almarhum Sultan Abdul Halim Mu’adzam Shah (Resigned on 5 April 2018)

50,690 2,000 - - - - 52,690

* The Senior Management of the Company consists of only Datuk Zainol Izzet Bin Mohamed Ishak, who is also the Managing Director of the Company and his remuneration as Senior Management is disclosed under Directors’ remuneration. As such, the remuneration of Senior Management was not disclosed separately.

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

1. Audit Committee (“AC”)

The AC currently comprises of two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director.FurtherdetailsoftheACmembers’experienceandqualificationsaresetoutinprofileontheBoardofDirectorson pages 8 to 12. The varied backgrounds of the AC members and their broad experience, knowledge and expertise from various industries allows them to discharge their duties effectively.

Both the AC Chairman and an AC member are qualified MIA members with relevant financial experiences in accounting and auditing. Collectively, all the AC members are financially literate and have knowledge and understanding of the matters under the purview of the AC including the principles and developments of financial reporting.

AlltheACmembersreceivetrainingsandcontinuousprofessionaldevelopmentssetoutinthisCGOverviewStatementonpage48.

The composition of the AC, including its roles and responsibilities are set out on pages 64 to 66 under the AC Report in this Annual Report.



2. External Auditors

Independence and Effectiveness

The Board upholds the integrity of financial reporting. The AC is entrusted to provide advice and assistance to the Board in fulfilling its statutory and fiduciary responsibilities relating to the Company’s internal and external audit functions, risk management and compliance systems and practice, financial statements, accounting and control systems and matters that may significantly impact the financial condition or affairs of the business. The AC is also responsible in ensuring that the financial statements of the Company comply with the applicable financial standards in Malaysia.

The AC members reviewed the Company’s financial statements in the presence of external auditors prior to recommending them for the Board’s approval and issuance to stakeholders.

The Board recognised the value of an effective AC in ensuring that the Company’s financial statements are reliable source of financial information by establishing procedures, via the AC.

The AC is responsible to monitor the performance, objectivity and independence of the external auditor. The AC acknowledges that it is important to maintain an open communication between the Board, the internal auditors and external auditors to ensure audit independence and effectiveness.

The AC reviewed the scope of the audit set out in the audit planning memorandum, work plan, areas of audit emphasis, fee proposal, issues arising from the audit and their resolution, audit judgements, level of errors identified during the audit and recommendations made by the external auditors in order to fulfil its responsibility for assessing the external audit process.

The AC meets with the external auditors once a year without presence of the executive Board members and Management to discuss key issues within their responsibilities. In addition, the external auditors are invited to attend the Company’s AGM and are available to attend questions from the shareholders.

The Board recognized the value of an effective AC in ensuring that the Company’s financial statements are reliable source of financial information by establishing procedures, via the AC.

In safeguarding and supporting external auditors’ independence and objectivity, the Company has adopted a formalised ExternalAuditorsAssessmentPolicyin2018whichsetsouttheselectionprocessofnewexternalauditors,basicprincipleson the prohibition of non-audits services and the approval process for the provision of non-audit services.

The non-audit fee incurred for the financial year 2018 was RM14,000. The Board is satisfied that the non-audit services during the year by external auditors does not affect the auditor’s independence.

The AC reviews annually the appointment of the auditor taking into account the effectiveness and independence of external auditors and ensure that other non-audit works will not be in conflict with the functions of the auditors. To review and assess the independence and effectiveness of the external auditors, the AC completes an external auditor evaluation form on the performanceoftheassignedauditteamonanannualbasis.Followingthereview,theAC,togetherwiththefeedbackfromthe management, makes recommendation to the Board.

The external auditors has confirmed in writing that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants(“MIA”).



3. Risk Management and Internal Control Framework

The Board acknowledges the significance of a sound system of risk management and internal control to manage the overall risk exposure of the Group.

The Group has an outsourced internal audit function and reports directly to the AC. The resources and scope of work covered by the internal audit function during the financial year under review, including its observation and recommendations, is provided in the Audit Committee Report of this Annual Report.

The AC meets regularly to review the risks identified and discuss on mitigation lack in place and report to the Board on quarterly basis. The Board affirms its overall responsibility with established and clear functional responsibilities and accountabilitieswhicharecarriedoutandmonitoredbytheExecutiveRiskManagementCommittee(“ERMC”).Theadequacyand effectiveness of the internal controls and risk management framework were reviewed by the AC and ERMC.

Details on the risk management and internal control system of the Group are set out in the Statement on Risk Management and Internal Control of this Annual Report.

4. Internal Audit Function

The Group has outsourced the internal audit function to a professional service firm which is independent of the activities and operations of the Group. The outsourced internal auditors report directly to the AC. Details on the internal audit function are set out in the AC Report and the Statement on Risk Management and Internal Control of this Annual Report.

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

INTEGRITY IN CORPORATE REPORTING

1. Directors’ Responsibility Statement

The Board is required to present the financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs, the results and cash flows of the Group and the Company.

The Board is satisfied that the Group has used the appropriate accounting policies and applied them consistently and supportedbyreasonableprudentjudgementandestimates,adoptedtoincludenewandrevisedMFRSswhereapplicable,inpreparing the financial statements of the Group and of the Company for the financial year ended 30 June 2018. The Board is also of the view that relevant approved accounting standards have been followed in the preparation of these financial statements.

The Board has also taken all such necessary steps to ensure that proper internal controls are in place to safeguard the assets of the Group and to detect and prevent fraud and other irregularities.

2. Appropriate Corporate Disclosure Policies and Procedures

The Group is committed to a policy which provides accurate, balanced, clear, timely and complete disclosure of corporate information to enable informed orderly market decisions by investors.

Importance is also placed on timely and equal dissemination of material information to the stakeholders, media and regulators. In this respect, theGrouphasadopteda formalisedCorporateDisclosurePolicyandProcedures in2018 toensure comprehensive, accurate and timely disclosures are provided to shareholders and stakeholders.



3. Communications with Stakeholders

The Board recognises the importance of maintaining transparency and accountability to its shareholders as a key element of good corporate governance and thus, maintains a high level of disclosure and communication with its shareholders through various means.

The Company meets with analysts, institutional fund managers, shareholders and potential investors to allow shareholders and other stakeholders to better understand the Company’s operations, performance and strategy direction and future prospects.

Significant matters relating to development of the business, reporting requirements etc are disseminated by way of announcements via Bursa Securities and press releases. Interim results are announced quarterly and full results in August 2018, followed by the annual report.

The Company’s website, www.perisai.biz provide equal access to the shareholders, investors and the public to obtain information on the Company’s press releases, corporate information, operation activities, financial results and other information regarding the Group. The website also provides investor relations contact to facilitate submission of queries from stakeholders or general public.

4. General Meetings

Shareholders’ meetings are important events for the Board to meet the shareholders. The Chairman allocated sufficient time to encourage the shareholders, proxies and the corporate representatives to ask questions pertaining to the matters tabled at general meetings or voice any concerns. The Board, Management team, the Company’s advisors if required and external auditors are present at the meeting to answer questions raised and provide clarification as required by the shareholders, proxies and corporate representatives.

TheFourteenthAGM (“14th AGM”)washeldon23November2017 at 10.00a.m. inKuala Lumpur. The 14th AGM is the principal forum for dialogue with shareholders. AGM provides an opportunity for shareholders to understand the financial and operational performance of the Company and to ask questions.

In addition to being dispatched individually to shareholders, the Notice of AGM is also circulated in a nationally circulated newspaper alongside an announcement on the website of Bursa Securities. This allows shareholders to have immediate access of the notice of AGM and make the necessary preparations for the AGM. Shareholders who were unable to attend are allowed to appoint proxies to attend, speak and vote on their behalf.

During the 14thAGM,theadvisorspresentedanupdateontheCompany’sProposedDebtRestructuringExercise(“ProposedRestructuring”) and highlighted the salient items to the shareholders. The Board also encourages participation fromshareholders by having a question and answer session during the AGM which the Directors (inclusive of the Chairman of the Board, AC, NC and RC) were available to provide meaningful responses to the questions raised by the shareholders.

All the resolutions set out in the Notice of the AGM were put to vote by poll voting and duly passed. The shareholders were informed of their right to demand for a poll. The outcome of the AGM was announced to Bursa Securities on the same meeting day. The Company had appointed one (1) independent scrutineer to verify the poll results.

A summary of the key matters discussed at the AGM, as soon as practicable after the conclusion of the AGM has been published on the Company’s website upon being reviewed by the Board members and approved by the Chairman.

5. Poll Voting

TheBoardnotedthatpursuanttoParagraph8.29AofListingRequirements,theCompanymustensurethatanyresolutionset out in the Notice of any general meeting is to be voted by poll. The Company has implemented poll voting for all resolutions via electronic means in 2017.



The Board will continue to adopt poll voting for all resolutions set out in the Notice of the 15th AGM of which the votes cast will be validated by an independent scrutineer. The outcome of all resolutions proposed at the 15th AGM is to be announced to Bursa Securities at the end of the meeting day while a summary of the key matters discussed at the 15th AGM shall be published on the Company’s website as soon as practicable after the conclusion of the 15th AGM.

FOCUS AREAS ON CORPORATE GOVERNANCE

Corporate governance was clearly imperative for the Group in the year 2018 against the backdrop of regulatory changes in corporate governance and a relatively challenging economic environment that is characterised by volatile market conditions and commodity prices. Against the aforementioned setting, during the year under review, the Board directed its focus on the core duties of the Board which is grounded on the creation of long-term value for stakeholders.

Corporate governance areas which gained heightened attention from the Board in 2018 were as follows:

TherewerechangesinthecompositionoftheBoard.NominationCommitteeandRemunerationCommittee.D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRajaTunkuSorayaAlmarhumSultanAbdulHalimMu’adzamShah,anIndependentNon-Executive Director of the Company had resigned on 5 April 2018 and following her resignation, she has also ceased to be membersoftheNominationCommittee(“NC”)andESOSCommitteeandinreplacementthereof,Dato’AnwarrudinBinAhamadOsman,theIndependentNon-ExecutiveChairmanoftheCompanyhasbeenappointedasMemberoftheNCoftheCompany.

Datuk Zainol Izzet Bin Mohamed Ishak, the Managing Director of the Company and Dato’ Dr. Mohamed Ariffin Bin Hj. Aton, a Non-Independent Non-Executive Director had stepped down as members of the Remuneration Committee on 29 August 2018 andinplacethereofDato’AnwarrudinBinAhamadOsman,theIndependentNon-ExecutiveChairmanwasappointedasmemberof the Remuneration Committee on even date.

TheBoardhasin2018reviewedandapprovedtherevisedBoardCharter,CodeofConductandEthicsandPoliciesandProceduresandalsoadoptednewPoliciesandProcedures toensure theyarekeptcontemporaneouswhilstequallykept relevant to theCompany’s needs. The Board will look into the enhancements or developments of corporate governance policies and procedures, as the case may be.

ACourtConvenedMeetingoftheCompanywasheldon8June2018inaccordancewiththeOrderdated8May2018grantedby the High Court of Malaya. The outcome from the poll voting results was very encouraging with 88% of the total votes in favour oftheProposedDebtResolution.

ThisCGOverviewStatementwasapprovedbytheBoardofDirectorsoftheCompanyon27September2018.

Composition of the Board, Nomination Committee and Remuneration Committee

Review of Board Charter, Policies and Procedures

Court Convened Meeting



NOMINATION COMMITTEE REPORT

COMPOSITION

TheNominationCommittee(“NC”)wasestablishedon15June2004andcomprisesexclusivelyofNon-ExecutiveDirectors,themajority of whom are Independent, which complies with the requirements of the Malaysian Code on Corporate Governance 2017 (MCCG). The current members are as follows:-

Name of Member Designation

Dato’ Yogesvaran A/L T. Arianayagam ChairmanIndependent Non-Executive Director

Dato’ Dr. Mohamed Ariffin Bin Hj. Aton MemberNon-Independent Non-Executive Director

Dato’AnwarrudinBinAhamadOsman MemberIndependent Non-Executive Chairman(Appointed on 5 April 2018)

D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRajaTunku MemberSoraya Almarhum Sultan Abdul Halim Mu’adzam ShahIndependent Non-Executive Director(Resigned on 5 April 2018)

TERMS OF REFERENCE

TheNCisgovernedbytheTermsofReference(“TOR”)andtheTORisconsistentwiththerequirementsofMMLRandtheMCCG.On27September2018,theNCTORwasrevisedtoreflectthenewrecommendedpracticesintheMCCG.TheTORoftheNCisavailable on the Company’s website at www.perisai.biz.

MEETINGS

The NC met once during the financial year ended 30 June 2018 and attended by two (2) of its members

Name of Member Meeting Attended

Dato’ Yogesvaran A/L T. Arianayagam 1/1Independent Non-Executive Director

Dato’ Dr. Mohamed Ariffin Bin Hj. Aton 1/1Non-Independent Non-Executive Director

Dato’AnwarrudinBinAhamadOsman NotapplicableIndependent Non-Executive Chairman(Appointed on 5 April 2018)

D.Y.A.MRajaPuanMudaPerakDarulRidzuanDatoSeriDiRajaTunku 0/1Soraya Almarhum Sultan Abdul Halim Mu’adzam ShahIndependent Non-Executive Director(Resigned on 5 April 2018)

The Company Secretaries act as the Secretaries to the NC. All proceedings of the NC meeting are duly recorded in the minutes and are properly kept by the Company Secretaries.


nomination committee report

Summary of Activities undertaken by the NC

(a) Conducted the annual assessment and the performance evaluation of the Board, Board Committees and individual Directors. Summarised the results of the annual assessment and the performance evaluation and reported to the Board on the outcome of such assessment.

(b) Reviewed the level of independence of the Independent Non-Executive Directors.

(c) Assessed the Directors’ training needs to ensure all Directors receive appropriate continuously training.

(d) Made recommendations to the Board for the re-election and re-appointment of the Directors who are subject to re-appointment and retirement at the forthcoming AGM.

(e) Reviewed and made recommendation to the Board for the adoption of the revised Terms of Reference of the NC.

(f) Reviewed the size of composition of the Board.

The NC’s recommendations were tabled to the Board for the Board’s consideration and approval.

Board Diversity

The Board acknowledges the importance of boardroom diversity and is supportive of the recommendation of the MCCG in relation to the establishment of boardroom diversity policy. Hence, the Board has reviewed and approved the Board Diversity Policyin2018.Nevertheless,theBoardhasnotsetanydiversitytargetonthecompositionofitsBoardmembersastheBoardbelieves that the selection of a Director shall be guided by the competency, skills, experience and knowledge of the individual candidate.

The Board also acknowledges the recommendation of MCCG pertaining to the establishment of boardroom gender diversity policy. Currently the Board is not represented by any female Director. The Board will look for opportunities to achieve the diversity target which includes gender diversity in line with MCCG. The critical attributes of suitable Board candidate include skills, knowledge, expertise and experience, professionalism, character, competence, commitment (including time commitment) and integrity that the candidate shall bring to the Board.

Annual Assessment of Directors

The Board, through the NC, conducts an annual assessment on its effectiveness as whole, each individual Director and the Board Committees established by the Board.

The Board is assessed in the areas of the Board’s roles and responsibilities, structure and composition, conduct, meeting process, interaction and communication with the Management and other stakeholders, as well as the effectiveness of the Chairman.

The Board Committees are assessed in terms of accountabilities and responsibilities and the success of the Committees in achieving its objectives. During the year, the NC and Board also reviewed the terms of reference of NC.

The board assessment was carried out during the financial year ended 30 June 2018 through questionnaires sent to each individual director and encompasses an assessment of the performance of the Board as a whole, the Board Committees and individual Directors (via self and peer assessment) as well as the independence of Independent Directors.


Re-election of Directors at the AGM

The Company’s Constitution provides that an election of Directors shall take place at an annual general meeting of the Company. All Directors shall retire from office once at least in every three (3) years, but shall be eligible for re-election.

The Directors to retire in every year shall be those who, being subject to retirement by rotation, have been longest in office since their last election or appointment but as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. A retiring Director shall be eligible for re-election.

Where a person has been appointed as Director either to fill a casual vacancy or as an additional Director, he shall hold office only until the next annual general meeting and shall then be eligible for re-election.

The NC also makes recommendations to the Board on the re-election of the Directors.

nomination committee report


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLINTRODUCTION

The Directors acknowledge their responsibilities over the risk management and internal control system in the Group, which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity, inordertosafeguardshareholders’ investmentandtheCompany’sassets. IncompliancewithParagraph15.26(b)oftheMainMarket Listing Requirements of Bursa Malaysia Securities Berhad, the Board is pleased to set out the Group’s Statement on Risk Management and Internal Control for the financial year ended 30 June 2018 which has been prepared in accordance with the “StatementonRiskManagementandInternalControl:GuidelinesforDirectorsofListedIssuers”.

For thepurposeof thisStatementonRiskManagementand InternalControl, the joint venturesand/orassociatecompaniesof the Group have not been taken into account. The Group’s interests in these joint ventures and/or associate companies are served through representation on the board of the joint ventures and/or associate companies as well as through the review of management financial statements.

BOARD RESPONSIBILITY

The Board of Directors is fully committed to ensure the existence of an effective system of internal control and risk management system within the Group and that the effectiveness, adequacy and integrity of those systems are reviewed on an on-going basis. However, the Board recognises that such systems are designed to manage the risks identified to acceptable levels rather than to eliminate them. Therefore, the systems implemented can provide only reasonable but not absolute assurance against the occurrence of any material misstatement or loss.

The Group has in place an on-going process for identifying, evaluating, monitoring and managing significant risks that may affect the achievement of corporate and business objectives. The risk management and internal control system covers operational, financial, management and compliance with applicable laws.

Whilst the Board has overall responsibility for the establishment of the Group’s risk management and internal control system, it has delegated the implementation and monitoring of this system to the Management who will report on identified risks and actions taken to mitigate and/or minimise the risks. The Management is responsible to identify and manage risks. Management meetings are held, where necessary to address significant issues as faced by the Group to ensure that such risks are closely monitored and appropriately addressed, managed, mitigated or eliminated. All significant risks of the Group are reported to the Board. Twice a year, the Management prepares a report detailing the significant risks, the status of risk reviews and the status of implementation of action plans, for review by the Board.

The Audit Committee with the support of the internal auditor, assist the Board in reviewing the adequacy, integrity and effectiveness of the risk management and internal control system within the Group. The internal auditor conducts an annual review of this system including the extent of compliance with the Group’s operating policies and procedures. The findings of the review are reported directly to the Audit Committee.

The composition and terms of reference and activities of the Audit Committee are set out on pages 64 to 66 of this Annual Report.

RISK MANAGEMENT FRAMEWORK

Risk management is a process that is carried out within the Group on an on-going basis and has been in place for the entire year under review and up to the date of approval of this statement for inclusion in the Annual Report. Risk Management practices are inculcated in the activities of the Group, which requires amongst others, establishing risk tolerance thresholds to identify, assess and monitor key risks faced by the Group. The monitoring and management of identified risks are undertaken by the Management and reported to the Board.

The Audit Committee working together with the Management continues to take measures to further strengthen the Group’s risk management system.


statement on risK management anD internaL controL

Inprovidingtheoversightofriskmanagementframework,anExecutiveRiskManagementCommittee(“ERMC”),chairedbytheManaging Director and comprising heads of department of the finance, corporate planning, legal and operational functions of the Group was established to assist the Board to oversee the overall risk management process. As part of the risk management framework, the following risk management approach has been adopted and applied by ERMC to facilitate the identification, assessment, monitoring, reporting and mitigation of risks within the Group:-

(a) Areas of concern including both internal and external factors that could adversely impact the achievement of the Group’s business objectives are identified and categorised into strategic, financial, operational, legal and compliance risks;

(b) The risks are then assessed using quantitative and qualitative aspects to determine their potential impact on the relevant business objectives and their likelihood of occurrence;

(c) AllidentifiedkeyrisksarecapturedonaPrincipalRiskMapmappingofthelevelofsignificanceoftheriskstotheGroupanddetermine the required prioritisation and focus for risk mitigation; and

(d) IdentifiedkeyriskstogetherwiththemitigationplansarereportedtotheBoardthroughaPrincipalRiskRegisterReport.

ThePrincipalRiskRegisterservesasatoolfortheheadsofdepartment/businessunitinmanagingkeyrisksapplicabletotheirrespective operations. The ERMC meets at least twice a financial year to assess whether any conditions associated with a particular risk have changed or any new areas are introduced requiring an assessment of risk. The status of mitigation plans and new identified risks are formally reported to the Board to ensure risk exposures are managed and required actions undertake in a timely manner.

During the financial year under review, the ERMC convened two discussions to review and deliberate on the Group’s significant risks as well as to update the risk exposure of the Group. Appropriate report was prepared accordingly. The above risk management process facilitates and enhances the ability of the Board and the Management to manage risks within defined risk parameters and risk standards.

INTERNAL CONTROL FRAMEWORK

The Group’s internal control environment comprises, amongst others, various procedures and frameworks which are as follows:-

Organisation Structure

The business of the Group is overseen by the Board which provides direction and oversight to the Managing Director who is supported by Management. The Board is supported by a number of established Board committees, namely the Audit, Nomination, RemunerationandEmployeesShareOptionScheme,allofwhichfacilitatetheBoardinthedischargeofitsduties.EachCommitteehas clearly defined terms of reference and responsibilities, and the activities of each Committee are reported back to the Board forinformationordecisionwhererelevant(pleaserefertotheCorporateGovernanceOverviewStatement).

The daily running of business is entrusted to the Managing Director and the Management team. This close-to-operations management style enables timely identification and reporting of significant matters.

Internal Audit Function

The Audit Committee evaluates the internal audit function to assess its effectiveness in discharge of its responsibilities. The Group’s internalaudit function isoutsourced toMessrs.HLHong&Co,anexternalconsultant toassist theBoardandAuditcommittee in providing independent assessment on the adequacy, efficiency and effectiveness of the Group’s internal control system. The Group internal audit function reports directly to the Audit Committee.


During the financial year ended 30 June 2018, risk-based approach internal audits were carried out in accordance to the internal planthathasbeenreviewedandapprovedbytheAuditCommittee.Observationsfromtheseauditsandpresented,togetherwithManagement’sresponseandproposedactionplans,totheAuditCommitteeforreview.Furtherdetailsoftheactivitiesoftheinternal audit are provided in the Audit Committee Report.

Strategic Business Plan, Budget and Performance Review

AnnualBusinessPlanandBudgetarepreparedonayearlybasisandaredeliberatedandapprovedbytheBoard.TheGroup’sStrategic Business Planmaps out the strategic objectives and business direction of theGroup. TheGroup’s businesses andfinancial performance are monitored and measured against the business plan and approved budget. Any major variance will be reviewed and corrective actions are undertaken.

Quarterly financial results are presented to and reviewed by the Audit Committee and the Board to enable them to monitor and evaluate the business and financial performance of the Group.

Limits of Authority (“LOA”) and Operating Procedures

The Board’s authority in the approval of certain matters are delegated to the Board Committees and members of Management throughaclearandformallydefinedLOAwhichistheprimaryinstrumentthatgovernsandmanagestheoperationalandbusinessdecisionprocessoftheGroup.WhilsttheobjectiveoftheLOAistoempower,thekeyprincipleadheredtoinitsformulationistoensurethatasystemofinternalcontrolofchecksandbalancesareincorporatedtherein.TheLOAisreviewedasandwhennecessary and updated to ensure relevance to the Group’s operations.

OtherinternalpoliciesandoperatingproceduresadoptedbytheGroupwillbeproperlydocumentedandcommunicatedsoasto ensure clear accountabilities.

Human Capital Management

A formal staff performance appraisal system, guided by key performance indicators to evaluate and measure employee performance and their competency is performed once a year to link performance with appropriate remuneration in order to create a high performance work culture. In addition training and development programmes are provided to the employees to enhance their knowledge and competency in carrying out their duties and responsibilities towards achieving the Group’s objectives as well as to develop internal talents to meet the Group’s future talent needs.

Information and Communication Processes

Comprehensive information covering financial performance, business operations, utilisation of funds and cashflow position are provided by the Management to the Board on a quarterly basis.

Independent Assurance Mechanism

Annual assessments are carried out through internal audits to assess the adequacy and integrity of the internal controls and risk management and also to monitor compliance with the policies and procedures of the Group. The Group has outsourced the function of internal audit to a professional service provider as it is more cost effective. The outsourcing of this function further enhances the professionalism and objectivity of this function as there is complete independence from the activities on which the audits are conducted over.

The Audit Committee has an active oversight on the internal audit’s independence, scope of work and resources. It also reviews the internal audit function, particularly the scope of the annual audit plan and frequency of internal audit activities.

Internal audit reports are presented to the Audit Committee upon its conclusion. Audit findings together with recommendations thereon are presented to Management and follow up audits are performed to track the status of implementation of corrective actions until completion to ensure Management action plans are carried out effectively.



Code of Conduct and Ethics

TheGrouphasestablishedandadoptedaCodeofConductandEthics(“COCE”)whichencapsulatesthecoreprinciplesoftheGroup.TheCOCEisexpectedtoguide,motivateandinspireconductwhichisethicalandprincipledintheeverydaydealingsof the Group’s business. With an application that extends not just to the Directors, officers and employees of the Group but alsotothirdpartiessuchascontractors,representativesandagentsoftheGroup,theCOCEisusedaspartoftheGroup’sriskmanagement mechanism to effectively control against the occurrence of any fraud, dishonest practices or conflict of interests.

Whistleblowing Policy

TheGrouphasalsoestablishedandput inplaceaWhistleblowingPolicy.ThisprovidesanavenuefortheBoard,officersandemployees as well as members of the public a safe channel of reporting of incidents which are against the regulations and policies oftheCompany.ThepolicyisamanifestationofthecontrolandriskmanagementobjectivesthattheCOCEseekstoachieve.

Emergency Response Plan

TheGrouphassetinplacetheemergencyresponsemeasuresunderanEmergencyResponsePlan,intheeventofacrisisoremergency.TheEmergencyResponsePlanhasbeenpreparedtomaximisehumansafety,protect theCompany’s reputationand image, preserve assets and property, minimise or eliminate danger and assure responsive communication to all appropriate parties, all of which with the objectives to restore normal operations of the Group.

The responsibilities in the event of an emergency are delegated among the Response Team, Incident Management Team and Crisis Management Team. The Response Team will activate the other teams in their areas of responsibility.

Insurance and Physical Safeguard

The Group maintains an appropriate insurance programme in order to provide sufficient insurance coverage on major assets of the Group and lawsuits that could result in material losses to the Group.

CONTROL AND MONITORING PROCESS

The Board is responsible for setting the Group’s long-term business objectives and monitors the conduct of the Group’s operations through various Board Committees. The processes adopted by the Board to monitor the effectiveness of the Group’s internal control system are as follows:-

• TheBoardandtheAuditCommitteemeettodiscussmattersraisedbyManagement,internalauditorsandexternalauditorson business and operational matters.

• TheBoardhasdelegatedtheresponsibilitiestoManagementoftheGrouptoimplementandmonitortheBoard’spolicieson control.

• Delegationofauthorityisdesignedtoensureaccountabilityandresponsibility.

• Internalproceduresandpoliciesaredocumented.

The monitoring, review and reporting arrangements in place give reasonable assurance that the structure of controls and its operations are appropriate to the Group’s operations and that risks are at an acceptable level throughout the Group’s businesses. Such arrangement, however, do not eliminate the possibility of human error or deliberate circumvention of control procedures by employees and others.



Periodicreviewsofadequacyandintegrityofselectedareasofinternalcontrolsystemsarecarriedoutbytheinternalauditfunction and results of such reviews are reported to the Audit Committee. The internal audit function thereby provides independent assurance on the areas reviewed by the internal audit function to the Board on the effectiveness of the Group’s internal control system.

CONCLUSION

Basedontheprocessessetoutabove,theBoard,havingreceivedassurancefromtheManagingDirectorandChiefFinancialOfficer that theCompany’s riskmanagement and internal control systemareoperating adequately and effectively, is of theview that the Group’s system of internal control and risk management in place for the year under review are generally adequate and effective to safeguard the assets of the Group and interest of the shareholders and have not resulted in any material losses, contingencies or uncertainties that would require disclosure in the Company’s Annual Report. Moving forward, the Group will continue to improve and enhance the existing system of internal control and risk management.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

AsrequiredbyParagraph15.23oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,theexternalauditorshave reviewed this Statement on Risk Management and Internal Control. Their limited assurance review was performed with AuditandAssurancePracticeGuides (AAPG)3 :Guidance forAuditorsonEngagements toReporton theStatementonRiskManagementandInternalControlincludedintheAnnualReport,issuedbytheMalaysiaInstituteofAccountants.AAPG3doesnot require the external auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group.

This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board of Directors dated 27 September 2018.



AUDIT COMMITTEE REPORT

MEMBERSHIP

TheAuditCommittee(“AC”)wasestablishedbytheBoardon15June2004.TheACpresentlycomprisesthreeNon-ExecutiveDirectors, a majority of them are Independent Directors:-

Chairman : Dato’ Yogesvaran A/L T. Arianayagam Independent Non-Executive Director

Members : Dato’AnwarrudinBinAhamadOsman Independent Non-Executive Chairman

ChanFeoiChun Non-Independent Non-Executive Director

ThisisinlinewithParagraph15.09oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)which prescribes that the AC must consist of at least three members with the Chairman and a majority of the members being independentnon-executivedirectorsandatleastonemembertobeamemberoftheMalaysianInstituteofAccountants(“MIA”).

TERMS OF REFERENCE

TheACisgovernedby itsTermsofReference(“TOR”),whichwasamendedaccordingtotherequirementsoftheMMLRandMalaysianCodeonCorporateGovernance2017(“MCCG2017”)andadoptedbytheBoardeffectiveon27September2018.TheTORoftheACisavailableontheCompany’swebsiteatwww.perisai.biz.

MEETINGS AND ATTENDANCE

A total of five (5) meetings were held during the financial year ended 30 June 2018 and the details of the meeting attendance are set out as follows:-

Members Number of Meetings Attended

Dato’ Yogesvaran A/L T. Arianayagam 5/5

Dato’AnwarrudinBinAhamadOsman 5/5

ChanFeoiChun 5/5

The Managing Director, Senior Management, external auditors and internal auditors were invited, when appropriate, to attend the meetings and presented their reports on financial results, audit and other matters for the information and/or approval of the AC.

The AC members were provided with the agenda and relevant committee papers before each meeting. The Company Secretaries act as the Secretaries to the AC.

Minutes of the AC meetings were distributed to the Board for notation. Significant issues are highlighted by the AC Chairman at each Board meeting for further discussion and deliberation, and where applicable, for the Board’s approval thereof.


SUMMARY OF ACTIVITIES UNDERTAKEN BY THE AC

During the financial year ended 30 June 2018, the activities carried out by the AC in discharging its functions and duties were as follows:-

1. Financial Reporting and Annual Reporting

(a) Reviewed the unaudited quarterly financial results and the annual audited financial statements of the Group before recommending them to the Board for the Board’s consideration and approval, ensuring that the financial reporting and disclosure requirements of relevant authorities have been complied with, focusing particularly on:-

• anychangesinorimplementationofmajoraccountingpoliciesandpractices;

• significantmattershighlightedincludingfinancialreportingissues,significantjudgmentsmadebymanagement,significant and unusual events or transactions and how these matters are addressed;

• compliancewithaccountingstandardsandotherlegalrequirements;

• adequacyofdisclosureofallinformationinthefinancialstatementsessentialtoatrueandfairrepresentationofthe financial affair of the Company and its subsidiary companies; and

• compliancewithapplicableapprovedaccountingstandards,financialreportingstandardsandbusinesspractices.

(b) ReviewedtheACReport,CorporateGovernanceOverviewStatementandtheStatementonRiskManagementandInternal Control for inclusion in the Annual Report and the CG Report.

2. Internal Audit

(a) ReviewedandapprovedtheAnnualInternalAuditPlantoensureadequatescopeandcoverageovertheactivitiesofthe Group and the resource requirements of internal audit to carry out its functions.

(b) Reviewed the Internal Audit Reports with recommendations from the internal auditors, Management’s response and follow up actions taken by the Management.

(c) Reviewed the status report on the corrective actions taken on the outstanding audit issues, submitted by the internal auditors, to ensure that all the key risks and controls have been addressed.

(d) Reviewed the internal audit function with particular emphasis on determining the adequacy of the scope, functions, competency, resources levels as well as the process and results of the internal audit functions.

3. External Audit

(a) Reviewed the Audit PlanningMemorandumwith the external auditors togetherwith their scope ofwork for thefinancial period prior to the commencement of audit.

(b) Discussed the External Auditor Reports and their findings and recommendations arising from the audit.

(c) Reviewed the scope of audit and the external auditors’ performance, their independence and objectivity and their services rendered including non-audit services.

(d) Considered and recommended to the Board for approval the audit fees payable to the external auditors and their re-appointment of services.

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4. Related Party Transactions and Recurrent Related Party Transactions

(a) Reviewed the related party transactions and recurrent related party transactions as well as conflict of interest situations that may arise within the Company or the Group and ensure that any transaction, procedure or course of conduct occurring in the course of the financial year which raises questions of management integrity were conducted on the Group’s normal commercial terms, done in the ordinary course of business and were not detrimental to the interest of minority shareholders.

(b) Reviewed the Circular to Shareholders relating to the renewal of shareholders’ mandate and new shareholders’ mandate for recurrent related party transactions prior to recommending them for the Board’s approval.

5. Others

(a) Reviewed the adequacy of insurance coverage, payment procedures and cash flow planning.

(b) ReviewedandverifiedtheallocationofoptionsundertheCompany’sEmployees’ShareOptionScheme.

(c) Met with the external auditors once during the financial period in the absence of the Management.

INTERNAL AUDIT FUNCTION

The Company has outsourced its internal audit function to an independent professional consultancy firm. The internal audit functioniscarriedoutbyHLHong&Co.(“HLHong”).

HL Hong reports directly to the AC and assists the AC in discharging its duties and responsibilities.

HLHongundertakestheinternalauditfunctioninconformancewiththeInternationalStandardsfortheProfessionalPracticeofInternal Auditing issued by the Institute of Internal Auditors.

The internal audit function is independent of the activities or operations of other operating units. Its principal role is to undertake independent, regular and systematic reviews of the system of internal control so as to provide reasonable assurance that such a system continue to operate satisfactorily and effectively. It is the responsibility of the internal auditors to provide the AC with independent and objective reports of the state of internal control on the various operating units within the Group and the extent of compliance of the units with the Group’s established policies and procedures as well as relevant statutory requirements.

Priortothecommencementoftheinternalauditreviews,anInternalAuditPlanisproducedandpresentedtotheACforapproval.This ensures that the audit direction is in line with the AC’s expectations. Upon approval by the AC, the internal audit reviews wouldbecarriedoutinaccordancewiththeapprovedInternalAuditPlan.Duringthefinancialyearunderreview,theinternalauditors have assessed the effectiveness of the enterprise risk management framework including risk communication and structure in place and risk management policy adopted by the Group. All audit findings were reported to the AC and, areas of improvement and audit recommendations identified are communicated to the Management for their action. The internal auditors have also followed-up on the implementation of corrective action plans agreed with the Management for audit issues raised in their previous reports.

FurtherdetailsoftheactivitiesoftheinternalauditfunctionaresetoutintheStatementonRiskManagementandInternalControl.

The costs incurred for the internal audit function for the financial year ended 30 June 2018 was RM14,000.

auDit committee report


ADDITIONAL COMPLIANCE INFORMATION

1. UTILISATION OF PROCEEDS FROM CORPORATE PROPOSAL

There were no proceeds from corporate proposals during the financial year.

2. AUDIT AND NON-AUDIT FEES

During the financial year, the total audit and non-audit fees incurred by the Company and the Group are as follows:-

Group Company

RM RM

AuditFees 178,600 72,000

Non-AuditFees 35,500 35,500

Total (RM) 214,100 107,500

The non-audit services comprised the following assignments:-

(a) Reporting Accountants in relation to the proposed restructuring and regularization plan;(b) Special audit review at the subsidiary level for period ended 30 June 2017 for consolidated purpose;(c) Review of statement of risk management and internal controls for the financial period ended 30 June 2017; and(d) Review of supplementary information on the disclosure of realized and unrealized profit and loss for the financial

period ended 30 June 2017.

3. MATERIAL CONTRACTS INVOLVING DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

During the financial period under review, there were no material contracts entered into by the Company and its subsidiaries which involved Directors’ or major shareholders’ interests (not being contracts entered into in the ordinary course of business).

4. RECURRENT RELATED PARTY TRANSACTIONS (“RRPTs”) OF A REVENUE AND TRADING NATURE

Detailson theRRPTsenteredby theGroupduring thefinancial yearended30June2018aredisclosed in theAuditedFinancialStatementsinthisAnnualReport.


STATEMENT OF DIRECTORS’ RESPONSIBILITY

The Directors are responsible in ensuring that the annual audited financial statements of the Group and of the Company are drawn up in accordance with the provisions of the Companies Act, 2016, the Main Market Listing Requirements of the applicable approvedFinancialReportingStandardsissuedbytheMalaysianAccountingStandardsBoard.

The directors are also responsible to ensure that the annual audited financial statements of the Group and of the Company present a true and fair view of the state of affairs of the Group and of the Company as at the financial year end and of their financial performance and cash flows for the financial year then ended.

In preparing the annual audited financial statements of the Group and of the Company for the year ended 30 June 2018, the directors have ensured that, appropriate and relevant accounting policies are adopted and consistently applied, reasonable and prudent estimates are made and going concern basis was adopted.

The directors are responsible to ensure that the Group and the Company keep accounting records which disclose with reasonable accuracy the financial position of the Group and the Company which enable that the financial statements comply with the CompaniesAct,2016,theMainMarketListingRequirementsandtherequirementsoftheapplicableapprovedFinancialReportingStandards issued by the Malaysian Accounting Standards Board.

The directors have the overall responsibilities for taking such steps that are reasonable available to them to safeguard the assets of the Group and the Company to prevent and detect fraud and other irregularities.


70 Directors’ Report76 Statements of Profit or Loss and

Other Comprehensive Income79 Statements of Financial Position81 Statements of Changes in Equity86 Statements of Cash Flows89 Notes to the Financial Statements171 Statement by Directors171 Statutory Declaration172 Independent Auditors’ Report

FINANCIAL STATEMENTS


DIRECTORS’ REPORT

DIRECTORS’ REPORT

The directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 30 June 2018.

PRINCIPAL ACTIVITIES

The principal activities of the Company are that of investment holding and provision of management, administrative and financial support services to the subsidiaries. The principal activities of the subsidiaries, associates and joint ventures are set out in Notes 14, 15, and 16 to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

RESULTS

Group Company

RM RM

Loss for the financial year (469,252,755) (369,853,195)

Attributable to:

Owners of the Company (455,622,618) (369,853,195)

Non-controlling interests (13,630,137) -

(469,252,755) (369,853,195)

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial period.

The directors do not recommend the payment of any dividend in respect of the current financial year ended 30 June 2018.

RESERVES OR PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those as disclosed in the financial statements.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and have satisfied themselves that there were no known bad debts and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would render it necessary to write off any bad debts or render the amount of allowance for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent.


CURRENT ASSETS

Before the financial statements of the Group and of the Company were prepared, the directors took reasonable steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; and

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

In the opinion of the directors, no contingent or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations as and when they fall due except for those disclosed in Note 2 to the financial statements.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

ITEMS OF MATERIAL AND UNUSUAL NATURE

In the opinion of the directors:

(i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than those as disclosed in Note 6 to the financial statements; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report was made.

ISSUE OF SHARES AND DEBENTURES

During the financial year, no new issue of shares and debentures were made by the Company.

directors’ report


TREASURY SHARES

Treasury shares relate to ordinary shares of the Company that are repurchased and held by the Company in accordance with the requirement of Section 127 of the Companies Act 2016 in Malaysia.

There was no repurchase of the Company’s issued ordinary shares, nor any resale, cancellation or distribution of treasury shares during the financial year.

As at 30 June 2018, the Company held as treasury shares a total of 400,000 ordinary shares of its 1,260,872,078 issued ordinary shares. Such treasury shares are held at a carrying amount of RM230,795. Further relevant details are disclosed in Note 20(c) to the financial statements.

OPTIONS GRANTED UNDER UNISSUED SHARES

No options were granted to any person to take up the unissued shares of the Company during the financial year, other than the issue of option pursuant to the Employee’s Share Option Scheme (“ESOS”).

EMPLOYEES’ SHARE OPTION SCHEME

At an Extraordinary General Meeting held on 27 June 2012, shareholders of the Company approved the ESOS for the granting of non-transferable options that are settled by physical delivery of the ordinary shares of the Company, to eligible senior executives and employees respectively.

The committee administering the ESOS comprises five directors, Dato’ Anwarrudin Bin Ahamad Osman, Datuk Zainol Izzet Bin Mohamed Ishak, Dato’ Yogesvaran A/L T. Arianayagam, Dato’ Dr. Mohamed Ariffin Bin Hj. Aton and Chan Feoi Chun.

The salient features and other terms of the ESOS and movements of share option during the financial year are disclosed in Note 29 to the financial statements.

The Company did not grant any additional share options under the ESOS to eligible directors and employees of the Group during the financial year.

The movements in the number of share options pursuant to the ESOS during the financial year are as follows:

Number of options (‘000)

Grant date Expiry date

Exercise price per

share option

At 1 July 2017 Forfeited

At 30 June

2018

4 July 2012 1 July 2022 RM0.785 19,987 (5,892) 14,095

25 June 2013 1 July 2022 RM1.440 11,556 (2,864) 8,692

19 June 2014 1 July 2022 RM1.400 9,595 (2,307) 7,288

17 June 2015 1 July 2022 RM0.400 29,377 (7,362) 22,015

70,515 (18,425) 52,090

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DIRECTORS

The directors in office during the financial year and during the period from the end of the financial year to the date of this report are:

Dato’ Anwarrudin Bin Ahamad Osman Datuk Zainol Izzet Bin Mohamed Ishak * Dato’ Yogesvaran A/L T. Arianayagam Dato’ Dr. Mohamed Ariffin Bin Hj. Aton * Chan Feoi Chun Adarash Kumar A/L Chranji Lal Amarnath * (Resigned on 30 January 2018)D.Y.A.M Raja Puan Muda Perak Darul Ridzuan Dato’ Seri DiRaja

Tunku Soraya Almarhum Sultan Abdul Halim Mu’adzam Shah (Resigned on 5 April 2018)

* Directors of the Company and certain subsidiaries

Other than as stated above, the names of the directors of the subsidiaries of the Company in office during the financial year and during the period from the end of the financial year to the date of the report are:

Beramkhan Bin Tambikhan Lee Kian Soo

DIRECTORS’ INTERESTS

According to the Register of Directors’ shareholdings required to be kept by the Company under Section 59 of the Companies Act 2016 in Malaysia, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:

(a) Shareholdings in the Company

Number of ordinary shares

At 1 July 2017

Exerciseof ESOS/

Bought

Sold At

30 June 2018

Direct interest

Dato’ Yogesvaran A/L T. Arianayagam 3,006,207 - - 3,006,207

Datuk Zainol Izzet Bin Mohamed Ishak 29,473,900 - - 29,473,900

Chan Feoi Chun 500,000 - - 500,000

Dato’ Dr. Mohamed Ariffin Bin Hj. Aton 85,000 - - 85,000

(b) Shareholdings in the subsidiaries

- Perisai Offshore Sdn. Bhd.


At 1 July 2017

Bought Sold

At 30 June 2018

Direct interest

Datuk Zainol Izzet Bin Mohamed Ishak 49,000 - - 49,000

directors’ report


DIRECTORS’ INTEREST (CONTINUED)

(b) Shareholdings in the subsidiaries (Continued)

- Larizz Energy Services Sdn. Bhd.


At At

1 July 2017 Bought Sold 30 June 2018

Direct interest

Datuk Zainol Izzet Bin Mohamed Ishak 60,000 - - 60,000

(c) Employees’ Share Option Scheme (“ESOS”)

Number of options

At At

Name 1 July 2017 Granted Exercised 30 June 2018

Dato’ Dr. Mohamed Ariffin Bin Hj. Aton 1,640,000 - - 1,640,000

Dato’ Yogesvaran A/L T. Arianayagam 2,340,000 - - 2,340,000

Chan Feoi Chun 1,440,000 - - 1,440,000

Datuk Zainol Izzet Bin Mohamed Ishak 11,200,000 - - 11,200,000

Dato’ Anwarrudin Bin Ahamad Osman 2,340,000 - - 2,340,000

DIRECTORS’ BENEFITS

Since the end of the previous financial period, no director of the Company has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable, by the directors as disclosed in Note 9 to the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any deemed benefits which may arise from transactions as disclosed in Note 33 to the financial statements.

Neither during, nor at the end of the financial year, was the Company a party to any arrangements where the object is to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate, other than those arising from the share options granted under the ESOS.

INDEMNITY TO DIRECTORS AND OFFICERS

During the financial year, the total amount of indemnity coverage and insurance premium paid for the directors and certain officers of the Company were RM15,000,000 and RM21,770 respectively.

SUBSIDIARIES

The details of the Company’s subsidiaries are disclosed in Note 14 to the financial statements.

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SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Details of significant events during the financial year are disclosed in Note 38 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

Details of significant events subsequent to the end of the financial year are disclosed in Note 39 to the financial statements.

AUDITORS

The auditors, Messrs Baker Tilly Monteiro Heng, have indicated their willingness to continue in office.

The details of the Group’s and the Company’s auditors’ remuneration are disclosed in Note 6 to the financial statements.

The indemnity to auditors of the Company is provided pursuant to Section 289 of the Companies Act 2016 in Malaysia.

This report was approved and signed on behalf of the Board of Directors in accordance with a resolution of the directors:

DATO’ ANWARRUDIN BIN AHAMAD OSMAN DATUK ZAINOL IZZET BIN MOHAMED ISHAKDirector Director

Date: 27 September 2018

directors’ report


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

Group Company

Note

Year ended

30.6.2018 RM

Period from 1.1.2016 to

30.6.2017 RM

Year ended 30.6.2018

RM


30.6.2017 RM

Revenue 4 127,179,778 275,586,632 2,690,614 8,589,960

Direct costs 5 (93,318,819) (213,432,747) - -

Gross profit 33,860,959 62,153,885 2,690,614 8,589,960

Other income 70,568,095 2,339,487 82,032,160 48,392,529

Administrative expenses (21,191,137) (49,349,406) (14,255,277) (34,323,143)

Other expenses (354,294,596) (388,415,600) (402,031,840) (278,834,113)

(375,485,733) (437,765,006) (416,287,117) (313,157,256)

Operating loss 6 (271,056,679) (373,271,634) (331,564,343) (256,174,767)

Finance costs 7 (78,287,281) (92,564,082) (38,288,852) (52,441,896)

Share of results of associates, net of tax 64,413 2,645,599 - -

Share of results of joint ventures, net of tax (119,436,890) (142,794,235) - -

Loss before tax (468,716,437) (605,984,352) (369,853,195) (308,616,663)

Income tax expense 10 (536,318) (968,203) - -

Loss for the financial year/period (469,252,755) (606,952,555) (369,853,195) (308,616,663)


stAteMeNts oF proFit or Loss ANd otHer coMpreHeNsiVe iNcoMe

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018 (CONTINUED)

Group Company

Note

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Other comprehensive (loss)/income, net of tax

Items that may be reclassified subsequently to profit or loss

Exchange differences on translation of foreign operations (40,461,084) (1,574,755) - -

Share of other comprehensive income of joint ventures (28,886,233) (2,237,484) - -

Share of other comprehensive income of associates (94,112) (69,608) - -

Reclassification of foreign currency translation reserve to profit or loss on repayment of inter-company balances 84,343 (1,806,099) - -

Realisation to profit or loss on liquidation 28,530,955 - - -

Cash flow hedge

- fair value changes during the financial year/ period - 10,544,022 - 10,544,022

- reclassification adjustments for amounts recognised in profit or loss - (7,201,835) - (7,201,835)

Other comprehensive (loss)/income for the financial year/period, net of tax (40,826,131) (2,345,759) - 3,342,187

Total comprehensive loss for the financial year/period (510,078,886) (609,298,314) (369,853,195) (305,274,476)


stAteMeNts oF proFit or Loss ANd otHer coMpreHeNsiVe iNcoMeFOR THE FINANCIAL YEAR ENDED 30 JUNE 2018 (CONTINUED)

Group Company

Note

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Loss attributable to:

Owners of the Company (455,622,618) (560,430,782) (369,853,195) (308,616,663)

Non-controlling interests (13,630,137) (46,521,773) - -

(469,252,755) (606,952,555) (369,853,195) (308,616,663)

Total comprehensive loss attributable to:

Owners of the Company (489,480,072) (562,005,631) (369,853,195) (305,274,476)

Non-controlling interests (20,598,814) (47,292,683) - -

(510,078,886) (609,298,314) (369,853,195) (305,274,476)

Loss per share attributable to owners of the Company (sen per share) 11

- Basic (36.15) (45.14)

- Diluted (36.15) (45.14)

The accompanying notes form an integral part of these financial statements.


STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2018

Group Company

Note 2018

RM 2017

RM 2018

RM 2017

RM

ASSETS

Non-current assets

Plant and equipment 12 662,558,359 1,053,295,913 105,015 318,535

Intangible asset 13 75,000 75,000 75,000 75,000

Investments in subsidiaries 14 - - 388,846,714 608,986,062

Investments in associates 15 1,137,606 1,977,305 300,000 300,000

Investments in joint ventures 16 396,855,051 547,006,594 28,900,003 72,011,543

Other receivables 18 - - - -

Total non-current assets 1,060,626,016 1,602,354,812 418,226,732 681,691,140

Current assets

Trade receivables 17 28,642,458 30,403,194 - 526

Other receivables and deposits 18 10,253,628 67,525,364 326,423 59,519,734

Prepayments 19 763,474 1,477,594 61,236 84,298

Tax recoverable 471,308 517,099 66,000 159,500

Deposits, cash and bank balances 28,385,391 16,392,276 1,318,598 1,229,421

Total current assets 68,516,259 116,315,527 1,772,257 60,993,479

TOTAL ASSETS 1,129,142,275 1,718,670,339 419,998,989 742,684,619


stAteMeNts oF FiNANciAL positioN AS AT 30 JUNE 2018 (CONTINUED)

Group Company

Note 2018

RM 2017

RM 2018

RM 2017

RM

EQUITY AND LIABILITIES

Equity attributable to owners of the Company

Share capital 20 770,888,300 770,888,300 770,888,300 770,888,300

Share premium 20 - - - -

Treasury shares 20 (230,795) (230,795) (230,795) (230,795)

Other reserves 21 282,787,142 324,234,201 23,587,923 31,115,145

Accumulated losses (1,410,269,560) (962,830,348) (1,211,352,870) (849,621,097)

(356,824,913) 132,061,358 (417,107,442) (47,848,447)

Non-controlling interests 98,242,790 118,841,604 - -

(CAPITAL DEFICIENCIES)/ TOTAL EQUITY (258,582,123) 250,902,962 (417,107,442) (47,848,447)

Non-current liabilities

Other payables 23 9,891,875 10,520,300 - -

Current liabilities

Trade payables 22 14,740,678 16,120,893 - -

Other payables and accruals 23 125,805,900 118,106,760 779,342,631 731,953,825

Provision 24 7,789,545 5,034,791 - -

Loans and borrowings 25 1,229,496,400 1,317,869,233 57,763,800 58,484,241

Hire purchase payables 26 - 95,000 - 95,000

Tax payable - 20,400 - -

Total current liabilities 1,377,832,523 1,457,247,077 837,106,431 790,533,066

TOTAL LIABILITIES 1,387,724,398 1,467,767,377 837,106,431 790,533,066

TOTAL EQUITY AND LIABILITIES 1,129,142,275 1,718,670,339 419,998,989 742,684,619



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D)


STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

Group Company

Note

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Cash flows from operating activities

Loss before tax (468,716,437) (605,984,352) (369,853,195) (308,616,663)

Adjustments for:

Bad debt written off - 72,000 - 72,000

Depreciation of plant and equipment 54,240,413 104,601,385 221,980 464,955

Financial guarantee contracts - - 52,573,106 88,754,806

Interest expense 78,287,281 92,564,082 38,288,852 52,441,896

Impairment loss on:

- investments in subsidiaries - - 220,097,038 -

- investments in joint ventures - 59,209,192 41,283,118 52,635,622

- amounts due from subsidiaries - - 20,470,352 131,297,938

- amounts due from joint ventures 55,983,974 - 55,816,467 -

- plant and equipment 276,648,810 186,324,561 - -

- prepayments - 28,556,511 - -

- trade receivables 13,933,481 108,363,150 42,156 1,497,796

- other receivables 933,135 - 19,000 -

Net unrealised loss on foreign exchange 6,724,953 5,890,185 11,730,603 4,575,949

Plant and equipment written off 70,243 - - -

Share of results of joint ventures 119,436,890 142,794,235 - -

Share options granted under ESOS 593,799 6,132,624 560,370 5,881,436

Bad debts relief (4,437,568) - - -

Dividend income - - (810,000) (4,497,000)

Interest income (338,448) (447,617) (24,771,939) (35,469,707)

Reversal of impairment loss on:

- investments in subsidiaries - - (1,353,500) (10,524,457)

- amounts due from subsidiaries - - (51,907,858) -

- trade receivables - - (680,681) -

Operating profit/(loss) before changes in working capital, balance carried down 133,360,526 128,075,956 (8,274,131) (21,485,429)


Group Company

Note

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Operating profit/(loss) before changes in working capital, balance brought down 133,360,526 128,075,956 (8,274,131) (21,485,429)

Surplus on liquidation (60,170,367) - - -

Share of results of associates (64,413) (2,645,599) - -

73,125,746 125,430,357 (8,274,131) (21,485,429)

Changes in working capital:

Receivables (14,790,543) (58,964,341) 457,329 420,882

Payables 3,673,963 19,781,968 443,487 5,606,711

Net cash generated from/(used in) operations 62,009,166 86,247,984 (7,373,315) (15,457,836)

Interest paid (29,356,539) (55,819,856) (1,768,280) (15,382,671)

Interest received 337,572 94,537 24,318 27,606

Dividend received 810,000 3,018,000 810,000 4,497,000

Income tax paid (589,521) (1,607,411) - (33,000)

Income tax refunded - 177,332 93,500 -

Net cash from/(used in) operating activities 33,210,678 32,110,586 (8,213,777) (26,348,901)

Cash flows from investing activities

Advances to joint ventures (39,272) (983,289) (39,272) (808,849)

Advances from/(to) subsidiaries - - 11,714,376 (17,537,981)

Prepayment of plant and equipment - (21,368,025) - -

Purchase of plant and equipment 12 (8,460) (1,841,333) (8,460) (53,877)

Cash outflow from liquidation (210) - - -

Net cash (used in)/from investing activities (47,942) (24,192,647) 11,666,644 (18,400,707)

stAteMeNts oF cAsH FLoWs FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018 (CONTINUED)


stAteMeNts oF cAsH FLoWs FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018 (CONTINUED)

Group Company

Note

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Cash flows from financing activities (a)

Payments of hire purchase (95,000) (181,395) (95,000) (181,395)

(Repayment to)/Advances from subsidiaries - - (1,958,249) 28,492,864

Net proceeds from share issuance pursuant to private placement

- Gross proceeds - 10,500,751 - 10,500,751

- Share issue expenses - (180,716) - (180,716)

Dividend paid to non-controlling interest - (1,465,248) - -

Drawdown of bank borrowings 1,239,960 11,204,080 1,239,960 -

Repayments of bank borrowings (17,445,885) (51,840,819) - -

Net cash (used in)/from financing activities (16,300,925) (31,963,347) (813,289) 38,631,504

Net increase/(decrease) in cash and cash equivalents 16,861,811 (24,045,408) 2,639,578 (6,118,104)

Cash and cash equivalents at beginning of the financial year/period 11,626,280 36,179,975 (3,536,575) 2,716,525

Effects of exchange rate changes on cash and cash equivalents (5,473,295) (508,287) (3,155,000) (134,996)

Cash and cash equivalents at end of the financial year/period 28 23,014,796 11,626,280 (4,051,997) (3,536,575)

(a) Reconciliation of liabilities arising from financing activities:

Group

At 1 July 2017

RM

Cash flows

RM

Non-cashforeign

exchange movement

RM

At 30 June 2018

RM

Hire purchase payable 95,000 (95,000) - -

Bank borrowings 1,313,103,237 (16,205,925) (72,771,507) 1,224,125,805

1,313,198,237 (16,300,925) (72,771,507) 1,224,125,805

Company

Hire purchase payable 95,000 (95,000) - -

Subsidiaries 576,521,476 (1,958,249) (30,686,640) 543,876,587

Bank borrowings 53,718,245 1,239,960 (2,565,000) 52,393,205

630,334,721 (813,289) (33,251,640) 596,269,792



NOTES TO THE FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan. The principal place of business of the Company is located at Suite 3A-17, Level 17, Block 3A, Plaza Sentral, Jalan Stesen Sentral 5, 50470 Kuala Lumpur.

The principal activities of the Company are investment holding and provision of management, administrative and financial support services to its subsidiaries. The principal activities of the subsidiaries, associates and joint ventures are disclosed in Notes 14, 15 and 16. There have been no significant changes in the nature of these activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 27 September 2018.

2. BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRSs”), the International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

2.2 Going concern assumption

During the financial year ended 30 June 2018, the Group and the Company incurred net losses of RM469,252,755 and RM369,853,195 respectively. As at that date, the Group and the Company had recorded net current liabilities of RM1,309,316,264 and RM835,334,174 and capital deficiencies of RM258,582,123 and RM417,107,442 respectively. Furthermore, in October 2016, the Company and its wholly-owned subsidiary, Perisai Capital (L) Inc. (“PCLI”) received a notice from the Trustee of the Medium Term Notes (“MTN”) that an event of default for the payment of principal and interest of the MTN had occurred as PCLI failed to pay the principal and interest due on 3 October 2016. Consequently, this gave rise to a cross default of the financing facilities with all other lenders of the Group and of the Company, including the joint ventures. These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern.

On 8 June 2018, in the court convened meeting, the scheme creditors of the Company approved the scheme with requisite majority.

On 1 August 2018, the application in relation to the proposed regularisation plan has been submitted to Bursa Malaysia Securities Berhad (“Bursa Securities”) and is currently pending for approval. Once approved, the proposed regularisation plan is expected to be completed by the fourth quarter of financial year ending 2019.

On 8 August 2018, the Company has obtained an extension of the Restraining Order from the High Court of Malaya at Kuala Lumpur for a further period of nine (9) months effective from 8 August 2018 restraining all proceedings and actions brought against the Company.

The basis for the preparation of the financial statements of the Group and of the Company is therefore dependent upon the successful formulation and implementation of the restructuring and regularisation plan, profitable operations of the Group and of the Company to generate sufficient cash flows in the future to fulfill their obligations as and when they fall due and financial support from its lenders and shareholders.


notes to the financial statements

2. BASIS OF PREPARATION (CONTINUED)

2.2 Going concern assumption (Continued)

In the event that these are not forthcoming, the Group and the Company may be unable to realise their assets and discharge their liabilities in the normal course of business. Accordingly, the financial statements may require adjustments relating to the amount and classification of recorded assets and to provide for further liabilities that may be necessary should the Group and the Company be unable to continue as a going concern.

The directors of the Company are of the opinion that the preparation of the financial statements of the Group and of the Company on a going concern basis remains appropriate as they believe the proposed restructuring and regularisation plan will obtain the support of the lenders and shareholders which will enable the Group and the Company to operate profitably in the foreseeable future, and accordingly, realise their assets and discharge their liabilities in the normal course of business.

2.3 Adoption of amendments/improvements to MFRSs

The Group and the Company have adopted the following amendments/improvements to MFRSs that are mandatory for the current financial year:

Amendments/Improvements to MFRSs MFRS 12 Disclosure of Interest in Other Entities MFRS 107 Statement of Cash Flows MFRS 112 Income Taxes

The adoption of the above amendments/improvements to MFRSs did not have any significant effect on the financial statements of the Group and of the Company, and did not result in significant changes to the Group’s and the Company’s existing accounting policies.

Amendments to MFRS 107 Statement of Cash Flows

Amendments to MFRS 107 require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including changes from cash flows and non-cash changes. The disclosure requirement could be satisfied in various ways, and one method is by providing reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities.

2.4 Revised Conceptual Framework for Financial Reporting (“Conceptual Framework”), new MFRSs, amendments/improvements to MFRSs, new IC Interpretation (“IC Int”) and amendments to IC Int that have been issued, but yet to be effective

The Group and the Company have not adopted the following revised Conceptual Framework, new MFRSs, amendments/improvements to MFRSs, new IC Int and amendments to IC Int that have been issued, but yet to be effective:

Effective forfinancial periods

beginning onor after

Revised Conceptual Framework 1 January 2020

New MFRSs

MFRS 9 Financial Instruments 1 January 2018

MFRS 15 Revenue from Contracts with Customers 1 January 2018

MFRS 16 Leases 1 January 2019

MFRS 17 Insurance Contracts 1 January 2021




2.4 Revised Conceptual Framework for Financial Reporting (“Conceptual Framework”), new MFRSs, amendments/improvements to MFRSs, new IC Interpretation (“IC Int”) and amendments to IC Int that have been issued, but yet to be effective (Continued)

Effective forfinancial periods

beginning onor after

Amendments/Improvements to MFRSs

MFRS 1 First-time adoption of MFRSs 1 January 2018

MFRS 2 Share-based Payment 1 January 2018/ 1 January 2020

MFRS 3 Business Contracts 1 January 2019/ 1 January 2020

MFRS 4 Insurance Contracts 1 January 2018

MFRS 6 Exploration for and Evaluation of Mineral Resources 1 January 2020

MFRS 9 Financial Instruments 1 January 2019

MFRS 10 Consolidated Financial Statements Deferred

MFRS 11 Joint Arrangements 1 January 2019

MFRS 14 Regulatory Deferral Accounts 1 January 2020

MFRS 101 Presentation of Financial Statements 1 January 2020

MFRS 108 Accounting Policies, Changes in Accounting Estimates and Error 1 January 2020

MFRS 112 Incomes Taxes 1 January 2019

MFRS 119 Employees Benefits 1 January 2019

MFRS 123 Borrowing Costs 1 January 2019

MFRS 128 Investments in Associates and Joint Ventures 1 January 2018/ 1 January 2019/Deferred

MFRS 134 Interim Financial Reporting 1 January 2020

MFRS 137 Provisions, Contingent Liabilities and Contingent Assets 1 January 2020

MFRS 138 Intangible Assets 1 January 2020

MFRS 140 Investment Property 1 January 2018

New IC Int

IC Int 22 Foreign Currency Transactions and Advance Consideration 1 January 2018

IC Int 23 Uncertainty over Income Tax Treatments 1 January 2019

Amendments to IC Int

IC Int 12 Service Concession Arrangements 1 January 2020

IC Int 19 Extinguishing Financial Liabilities with Equity Instruments 1 January 2020

IC Int 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2020

IC Int 22 Foreign Currency Transactions and Advance Consideration 1 January 2020

IC 132 Intangible Assets – Web Site Costs 1 January 2020





The Group and the Company plan to adopt the above applicable revised Conceptual Framework, new MFRSs, amendments/improvements to MFRSs, new IC Int and amendments to IC Int when they become effective. A brief discussion on the above significant revised Conceptual Framework, new MFRSs, amendments/improvements to MFRSs, new IC Int and amendments to IC Int are summarised below.

Conceptual Framework and related amendments to MFRSs and IC Int

The revised Conceptual Framework comprises a comprehensive set of concepts of financial reporting. It is built on the previous version of the Conceptual Framework issued in 2011. The changes to the chapters on the objective of financial reporting and qualitative characteristics of useful financial information are limited, but with improved wordings to give more prominence to the importance of providing information need to assess management’s stewardship of the entity’s economic resources.

Other improvements of the revised Conceptual Framework include a new chapter on measurement, guidance on reporting financial performance, improved definitions and guidance – in particular the definition of a liability – and clarifications in important areas, such as the role of prudence and measurement uncertainty in financial reporting.

The amendments to the fourteen Standards are to update the references and quotations in these Standards which include MFRS 2, MFRS 3, MFRS 6, MFRS 14, MFRS 101, MFRS 108, MFRS 134, MFRS 137, MFRS 138, IC Int 12, IC Int 19, IC Int 20, IC Int 22 and IC Int 132.

MFRS 9 Financial Instruments

Key requirements of MFRS 9:

• MFRS9introducesanapproachforclassificationoffinancialassetswhichisdrivenbycashflowcharacteristicsand the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments.

In essence, if a financial asset is a simple debt instrument and the objective of the entity’s business model within which it is held is to collect its contractual cash flows, the financial asset is measured at amortised cost. In contrast, if that asset is held in a business model the objective of which is achieved by both collecting contractual cash flows and selling financial assets, then the financial asset is measured at fair value in the statements of financial position, and amortised cost information is provided through profit or loss. If the business model is neither of these, then fair value information is increasingly important, so it is provided both in the profit or loss and in the statements of financial position.

• MFRS9introducesanew,expected-lossimpairmentmodelthatwillrequiremoretimelyrecognitionofexpectedcredit losses. Specifically, this Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity to recognise expected credit losses at all times and to update the amount of expected credit losses recognised at each reporting date to reflect changes in the credit risk of financial instruments. This model eliminates the threshold for the recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit losses are recognised.

• MFRS 9 introduces a substantially-reformedmodel for hedge accounting,with enhanced disclosures aboutrisk management activity. The new model represents a significant overhaul of hedge accounting that aligns the accounting treatment with risk management activities, enabling entities to better reflect these activities in their financial statements. In addition, as a result of these changes, users of the financial statements will be provided with better information about risk management and the effect of hedge accounting on the financial statements.





MFRS 15 Revenue from Contracts with Customers

The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with the core principle by applying the following steps:

(i) identify the contracts with a customer;(ii) identify the performance obligation in the contract;(iii) determine the transaction price;(iv) allocate the transaction price to the performance obligations in the contract;(v) recognise revenue when (or as) the entity satisfies a performance obligation.

MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers.

The following MFRSs and IC Interpretations will be withdrawn on the application of MFRS 15:

MFRS 111 Construction ContractsMFRS 118 RevenueIC Interpretation 13 Customer Loyalty ProgrammesIC Interpretation 15 Agreements for the Construction of Real EstateIC Interpretation 18 Transfers of Assets from CustomersIC Interpretation 131 Revenue – Barter Transactions Involving Advertising Services

MFRS 16 Leases

Currently under MFRS 117 Leases, leases are classified either as finance leases or operating leases. A lessee recognises on its statement of financial position assets and liabilities arising from the finance leases.

MFRS 16 eliminates the distinction between finance and operating leases for lessees. All leases will be brought onto its statement of financial position except for short-term and low value asset leases.

Amendments to MFRS 2 Share-based Payment

Amendments to MFRS 2 provide specific guidance on the accounting for:

(a) the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments;(b) share-based payment transactions with a net settlement feature for withholding tax obligations; and(c) a modification to the terms and conditions of a share-based payment that changes the classification of the

transaction from cash-settled to equity-settled.





Amendments to MFRS 9 Financial Instruments

Amendments to MFRS 9 allow companies to measure prepayable financial assets with negative compensation at amortised cost or at fair value through other comprehensive income if certain conditions are met.

The amendments also clarify that when a financial liability measured at amortised cost is modified without this resulting in derecognition, a gain or loss should be recognised in profit or loss.

Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments in Associates and Joint Ventures

These amendments address an acknowledged inconsistency between the requirements in MFRS 10 and those in MFRS 128, in dealing with the sale or contribution of assets between an investor and its associate or joint venture.

The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business, as defined in MFRS 3. A partial gain or loss is recognised when a transaction involves assets that do not constitute a business.

Amendments to MFRS 112 Income Taxes

Amendments to MFRS 112 clarify that an entity recognises the income tax consequences of dividends in profit or loss because income tax consequences of dividends are linked more directly to past transactions than to distributions to owners, except if the tax arises from a transaction which is a business combination or is recognised in other comprehensive income or directly in equity.

Amendments to MFRS 119 Employee Benefits

Amendments to MFRS 119 require an entity to use updated actuarial assumptions to determine current service cost and net interest for the remainder of the annual reporting period after the plan amendment, curtailment or settlement when the entity remeasures its net defined benefit liability (asset).

Amendments to MFRS 123 Borrowing Costs

Amendments to MFRS 123 clarify that when a qualifying asset is ready for its intended use or sale, an entity treats any outstanding borrowing made specifically to obtain that qualifying asset as part of general borrowings.

Amendments to MFRS 128 Investments in Associates and Joint Ventures

Amendments to MFRS 128 clarify that an entity, which is a venture capital organisation, or a mutual fund, unit trust or similar entities, has an investment-by-investment choice to measure its investments in associates or joint ventures at fair value through profit or loss.

The amendments also clarify that companies shall apply MFRS 9, including its impairment requirements, to account for long-term interests in an associate or joint venture that, in substance, form part of the net investment in the associate or joint to which the equity method is not applied.





IC Int 22 Foreign Currency Transactions and Advance Consideration

IC Int 22 clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration.

IC Int 23 Uncertainty over Income Tax Treatments

IC Int clarifies that where there is uncertainty over income tax treatments, an entity shall:

(i) assume that a taxation authority will examine amounts it has a right to examine and have full knowledge of all related information when making those examinations.

(ii) reflect the effect of uncertainty in determining the related tax position (using either the most likely amount or the expected value method) if it concludes it is not probable that the taxation authority will accept an uncertain tax treatment.

The detailed analysis on the financial effects of the adoption of other new MFRSs, amendments/improvements to MFRSs and new IC Int are currently still being assessed by the Group and the Company.

2.5 Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which they operate (“the functional currency”) which includes United States Dollar (“USD”), Singapore Dollar (“SGD”) and Ringgit Malaysia (“RM”). The consolidated financial statements are presented in RM, which is also the Company’s functional currency, and has been rounded to the nearest RM, unless otherwise stated.

2.6 Basis of measurement

The financial statements of the Group and of the Company have been prepared on the historical cost basis, except as otherwise disclosed in Note 3.

2.7 Use of estimates and judgement

The preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reporting period. It also requires directors to exercise their judgement in the process of applying the Group’s and the Company’s accounting policies. Although these estimates and judgement are based on the directors’ best knowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates that are significant to the Group’s and the Company’s financial statements are disclosed in Note 2.8.




2.8 Significant accounting judgements, estimates and assumptions

Significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have significant effect in determining the amount recognised in the financial year include the following:

(a) Impairment of plant and equipment (Note 12) – The Group assesses impairment of assets whenever the events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, i.e. the carrying amount of the asset is more than the recoverable amount. The management relies on the professional valuer to determine the recoverable amount. Judgement is also required in the estimation of recoverable amount based on the combination of market, cost and income approach in order to determine the newbuilt cost, useful lives and salvage value of similar asset.

(b) Financial guarantee contracts (Note 23) – Financial guarantee contracts are measured at fair value on initial recognition after accounting for the probability of the guarantee will be called upon. Subsequent to initial recognition, financial guarantee contracts are measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation. In assessing the amount subsequently recognised, significant judgement is required in estimating the expenditure which is the expected cash outflows required to settle the defaulted borrowings and interest payables of the subsidiaries and joint ventures, including the value of assets pledged for the borrowings.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the following accounting policies have been applied consistently to all the financial years presented in the financial statements of the Group and of the Company.

3.1 Basis of consolidation

(a) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entities and has the ability to affect those returns through its power over the entities. The Group reassess whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of controls as mentioned above.

When the Group has less than majority of the voting rights of an investee, it has power over the investee when the

voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group’s voting rights in an investee are sufficient to give it power, including:

• ThesizeoftheGroup’sholdingofvotingrightsrelativetothesizeanddispersionofholdingsoftheotherholders;

• Potentialvotingrights,ifsuchrightsaresubstantive,heldbytheGroup,othervoteholdersorotherparties;• Rightsarisingfromothercontractualarrangements;• ThenatureoftheGroup’srelationshipwithotherpartiesandwhetherthoseotherpartiesareactingonits

behalf (i.e. they are ‘de facto agents’); and• AnyadditionalfactsandcircumstancesthatindicatetheGrouphas,ordoesnothave,thecurrentability

to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

3.1 Basis of consolidation (Continued)

(a) Subsidiaries (Continued)

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, if any.

The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.

(b) Accounting for business combinations

Business combinations are accounted for using acquisition method from the acquisition date, which is the date on which control is transferred to Group.

The Group measures goodwill at the acquisition date as:

(i) The fair value of the consideration transferred; plus(ii) The recognised amount of any non-controlling interests in the acquiree; plus(iii) If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree;

less(iv) The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at the acquisition date either at fair value or at the proportionate share of the acquiree’s identifiable net assets.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent

consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.

(c) Accounting for acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any differences between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.





(d) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(e) Non-controlling interests

Non-controlling interests at the reporting date, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the financial year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

(f) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

(g) Associates and joint ventures

Associates are entities, including unincorporated entities, in which the Group has significant influence, but not in control, over the financial and operating policies.

Joint ventures are joint arrangements whereby the parties that have joint control of the arrangements have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

Associates or joint ventures are accounted for in the consolidated financial statements using the equity method and joint ventures of accounting unless it is classified as held for sale (or included in a disposal group that is classified as held for sale). Under the equity method, an investment in an associate or joint venture is initially recognised at cost. Thereafter, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates or joint ventures, after adjustments to align the accounting policies with those of the Group, from the date that the investee becomes an associate or joint venture.

Goodwill relating to associates or joint ventures is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from carrying amount of the investment and is instead included as income in the determination of the Group’s shares of the associate’s profit or loss for the period in which the investment is acquired.





(g) Associates and joint ventures (Continued)

When the Group’s share of losses exceeds its interest in an associate or joint venture, the carrying amount of that interest (including any long-term interests that, in substance, form part of the Group’s net investment in the associate or joint venture) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has a legal or constructive obligation or has made payments on behalf of the investee. Should the associate or joint venture subsequently report profits, the Group will only resume to recognise its share of profits after its share of profits equals to the share of losses previously not recognised.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investments in its associates or joint ventures. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate and joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognises the amount in profit or loss. Any reversal of impairment loss is recognised in profit or loss to the extent that the recoverable amount of the investment subsequently increases.

Investments in associates or joint ventures are stated in the Company’s statement of financial position at cost less impairment losses, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale).

The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or joint venture, or when the investment is classified as held for sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with MFRS 139. The difference between the carrying amount of the associate or joint venture at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate or joint venture on the same basis as would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassified the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.

The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes in ownership interest.

When the Group reduces its ownership interest in an associate or joint venture but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When a group entity transacts with an associate or joint venture of the Group, profits and losses resulting from the transactions with associate or joint venture are recognised in the Group’s consolidated financial statements only to the extent of interest in the associate or joint ventures that are not related to the Group.




3.2 Separate financial statements

In the Company’s statement of financial position, investment in subsidiaries, joint ventures and associates are measured at cost less any accumulated impairment losses, unless the investment is classified as held for sale or distribution. The policy for the recognition and measurement of impairment losses shall be applied on the same basis as would be required for impairment of non-financial assets as disclosed in Note 3.12 to the financial statements.

Contributions to subsidiaries are amounts which the company does not expect repayment in the foreseeable future and are considered as part of the Company’s investment in the subsidiaries.

3.3 Foreign currency transaction and operations

(a) Foreign currency transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the Group entities’ functional currency (foreign currencies) are translated into the Group entities’ functional currency at the rates of exchange ruling at the time of the transaction date. Monetary items denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary items denominated in foreign currencies are not retranslated at the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on settlement of monetary items and on retranslation of monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation. These are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operations are recognised in profit or loss in the Company’s separate financial statements or the individual financial statements of the foreign operation, as appropriate.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(b) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”)

The results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows:

(i) Assets and liabilities for each reporting date presented are translated at the closing rate prevailing at the reporting date;

(ii) Income and expenses are translated at average exchange rate for the financial year, which approximates the exchange rates at the date of the transactions; and

(iii) All resulting exchange differences are taken to other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.




3.3 Foreign currency transaction and operations (Continued)

(b) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”) (Continued)

Upon disposal of a foreign operation, the cumulative amount of translation differences at the date of disposal of the foreign operation is taken to the consolidated statement of profit or loss and other comprehensive income.

3.4 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(a) Charter income

Charter hire income from MOPU and vessels is recognised on a time proportionate basis over the term of the charter hire contract.

(b) Drilling revenue

Drilling revenue is recognised when services are rendered.

(c) Interest income

Interest income is recognised using the effective interest method.

(d) Management fee

Management fee is recognised when services are rendered.

(e) Rental income

Rental income is recognised on a straight-line basis over the lease terms.

(f) Dividend income

Dividend income is recognised when the right to receive payment is established.

3.5 Employee benefits

(a) Short-term employee benefits

Short-term employee benefit obligation in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans, if any, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

The Group’s contributions to the Employees Provident Fund or other defined contributable plans are charged to profit or loss in the financial year to which they relate. Once the contributions have been paid, the Group has no further payment.




3.5 Employee benefits (Continued)

(b) Employees’ share option scheme (“ESOS”)

Employees of the Group receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the options at the date on which the options are granted. This cost is recognised in profit or loss, with a corresponding increase in the employee share option reserve over the vesting period. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised at the beginning and end of that period.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. The employee share option reserve is transferred to retained earnings upon expiry of the share options. When the options are exercised, the employee share option reserve is transferred to share capital if new shares are issued, or to treasury shares if the options are satisfied by the reissuance of treasury shares.

(c) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits as liability and an expense when it is demonstrably committed to either terminate the employment of current employees according to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage redundancy, the measurement of termination benefits is based on the number of employee expected to accept the offer. Benefits falling due more than twelve months after financial position date are discounted to present value.

3.6 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowings costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds.

3.7 Leases

(a) Finance lease or hire purchase – the Group as lessee

Assets acquired by way of finance leases or hire purchase where the Group assumes substantially all the benefits and risks of ownership are classified as plant and equipment.

Finance lease or hire purchase is capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges. The corresponding finance lease obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.




3.7 Leases (Continued)

(a) Finance lease or hire purchase – the Group as lessee (Continued)

Plant and equipment acquired under finance lease is depreciated in accordance with the depreciation policy for plant and equipment.

(b) Operating lease – the Group as lessee

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentive provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(c) Operating lease – the Group as lessor

Assets leased out under operating leases are presented on the statements of financial position according to the nature of the assets. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

3.8 Tax expense

(a) Current tax

Tax expense in profit or loss represents the aggregate amount of current and deferred tax. Current tax is the expected amount payable in respect of taxable income for the year, using tax rates enacted or substantially enacted by the reporting date, and any adjustments recognised for prior years’ tax. When an item is recognised outside profit or loss, the related tax effect is recognised either in other comprehensive income or directly in equity.

(b) Deferred tax

Deferred tax is recognised using the liability method, on all temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not recognised if the temporary difference arises from goodwill or from the initial recognition of an asset or liability in a transaction, which is not a business combination and at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to apply in the period in which the assets are realised or the liabilities are settled, based on tax rates and tax laws that have been enacted or substantially enacted by the reporting date.

Deferred tax assets are recognised only to the extent that there are sufficient taxable temporary differences relating to the same taxable entity and the same taxation authority to offset or when it is probable that future taxable profits will be available against which the assets can be utilised.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will be available for the assets to be utilised.

Deferred tax assets relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from business combination is adjusted against goodwill on acquisition or the amount of any excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the acquisition cost.




3.8 Tax expense (Continued)

(c) Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”) except:

• wheretheGSTincurredinapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority,in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivablesandpayablesthatarestatedwiththeamountofGSTincluded.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

3.9 Plant and equipment

All items of plant and equipment are initially recorded at cost. The cost of an item of plant and equipment is recognised as an asset of, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to initial recognition, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses if any. When significant parts of plant and equipment are required to be replaced in intervals, the Group recognises such part as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

The principal annual rates for the current and comparative financial years are as follows:

Office equipment, furniture and fittings 10%Renovation, air conditioners and site equipment 10%Tools and equipment 20%Motor vehicles 20%Computers and software 33.33% Jack-up rig, MOPU, marine vessels and equipment 3 – 30 years

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The policy of recognition of impairment losses is in accordance with Note 3.12.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.




3.10 Goodwill on business combination

Goodwill arises on the acquisition of subsidiaries.

The goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

Goodwill is measured at cost and is not amortised but tested for impairment at least annually or more frequently when there is objective evidence of impairment.

Goodwill is allocated to cash generating units and is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired.

In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment. The entire carrying amount of the investment is tested for impairment when there is objective evidence of impairment.

3.11 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses, if any.

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the assets is derecognised.

3.12 Impairment of non-financial assets

The carrying amounts of non-financial assets other than deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the asset’s recoverable amount is estimated. The recoverable amount is the higher of fair value less costs of disposal and the value in use, which is measured by reference to discounted future cash flows and is determined on an individual asset basis, unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs to.

An impairment loss is recognised whenever the carrying amount of an item of asset exceeds its recoverable amount. An impairment loss is recognised as expense in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis.

Any subsequent increase in recoverable amount of an asset, other than goodwill, due to a reversal of impairment loss is restricted to the carrying amount that would have been determined (net of accumulated depreciation, where applicable) had no impairment loss been recognised in prior years. The reversal of impairment loss is recognised in profit or loss.




3.13 Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition and have categorised financial assets in loans and receivables.

(i) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current, except for those having maturity date later than 12 months after

the reporting date which are classified as non-current.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument, or where appropriate, a shorter period to the net carrying amount on initial recognition.

3.14 Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(a) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.




3.14 Impairment of financial assets (Continued)

(a) Trade and other receivables and other financial assets carried at amortised cost (Continued)

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

3.15 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdraft.

3.16 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

3.17 Treasury shares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasure shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.

3.18 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

(a) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.




3.18 Financial liabilities (Continued)

(a) Other financial liabilities (Continued)

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Loans and borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

3.19 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.20 Contingencies

(a) Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(b) Contingent assets

When an inflow of economic benefit of an asset is probable where it arises from past events and where existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, the asset is not recognised in the statements of financial position but is being disclosed as a contingent asset. When the inflow of economic benefit is virtually certain, then the related asset is recognised.

3.21 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 42, including the factors used to identify the reportable segments and the measurement basis of segment information.




3.22 Fair value measurement

Fair value of an asset or a liability, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

3.23 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

4. REVENUE

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Dividend income from:

- subsidiary - - - 1,479,000

- associate - - 810,000 3,018,000

Management fee - - 1,880,614 4,092,960

Charter income 13,124,321 90,650,597 - -

Drilling revenue 114,055,457 184,936,035 - -

127,179,778 275,586,632 2,690,614 8,589,960

5. DIRECT COSTS

Group

Year ended

30.6.2018 RM


30.6.2017 RM

Cost of services rendered 93,318,819 213,432,747



6. OPERATING LOSS

Other than disclosed elsewhere in the financial statements, the following items have been charged/(credited) in arriving at operating loss:

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Auditors’ remuneration:

- statutory audit:

- current financial year/period 178,600 156,800 72,000 65,000

- other services 35,500 107,000 35,500 92,000

Bad debts written off - 72,000 - 72,000

Depreciation of plant and equipment 54,240,413 104,601,385 221,980 464,955

Employee benefits expenses (including key management personnel) (Note 8) 20,940,409 40,410,641 7,125,497 18,472,096


Impairment loss on:

- plant and equipment 276,648,810 186,324,561 - -

- prepayments - 28,556,511 - -

- trade receivables 13,933,481 108,363,150 42,156 1,497,796

- other receivables 933,135 - 19,000 -

- investments in subsidiaries - - 220,097,038 -

- investments in joint ventures - 59,209,192 41,283,118 52,635,622

- amounts due from subsidiaries - - 20,470,352 131,297,938

- amounts due from joint ventures 55,983,974 - 55,816,467 -

Plant and equipment written off 70,243 - - -

Rental of office 2,761,543 2,337,962 773,760 1,233,130

Rental of office equipment 25,361 36,775 25,361 36,775

Bad debts relief (4,437,568) - - -

Reversal of impairment loss on:

- investments in subsidiaries - - (1,353,500) (10,524,457)

- trade receivable (512,920) - (680,681) -

- amounts due from subsidiaries - - (51,907,858) -

Surplus on liquidation (60,170,367) - - -

Late payment interest income (544,128) (353,128) - -

Interest income from:

- subsidiaries - - (24,746,745) (35,442,149)

- third parties (338,448) (94,489) (25,194) (27,558)

Net (gain)/loss on foreign exchange:

- unrealised 6,724,953 5,890,185 11,730,603 4,575,949

- realised (4,445,505) (585,105) (3,174,020) (1,848,680)

Sub-rental income on office (25,382) (1,158,821) (71,382) (433,696)



7. FINANCE COSTS

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Interest expense on:

- Bank overdraft 1,685,835 1,367,956 1,685,835 1,367,956

- Hire purchase 1,602 11,853 1,602 11,853

- Loans from subsidiaries - - 34,075,871 47,607,002

- Medium term notes 34,168,451 40,504,616 193,986 405,379

- Revolving credit 2,331,558 2,870,624 2,331,558 3,049,706

- Term loans 40,099,835 47,809,033 - -

78,287,281 92,564,082 38,288,852 52,441,896

8. EMPLOYEES BENEFITS EXPENSE

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Wages and salaries 17,716,732 31,209,548 5,647,058 11,096,064

Defined contribution plan and social security contribution 2,166,540 3,598,546 726,960 1,338,646


Other benefits 463,338 76,814 191,109 155,950

20,940,409 40,410,641 7,125,497 18,472,096

Included in employees benefits expense are executive directors’ remuneration of the Group and of the Company amounting to RM1,312,239 (2017: RM3,854,502) and RM1,196,796 (2017: RM3,623,982) respectively.



9. DIRECTORS’ REMUNERATION

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Executive directors’ remuneration:

- Salaries and bonus 1,020,162 1,989,000 918,000 1,785,000

- Other emoluments 178,317 353,978 165,036 327,458

- Share options granted under ESOS 113,760 1,511,524 113,760 1,511,524

1,312,239 3,854,502 1,196,796 3,623,982

Non-executive directors’ remuneration:

- Fee 388,561 556,050 388,561 556,050


- Share options granted under ESOS 59,608 606,891 59,608 606,891

504,169 1,259,941 504,169 1,259,941

Total directors’ remuneration 1,816,408 5,114,443 1,700,965 4,883,923

The estimated monetary value of benefits-in-kind received and receivable by directors of the Company from the Group and the Company amounted to RM28,788 (2017: RM39,595).

10. INCOME TAX EXPENSE

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Current tax:

Malaysian

- current financial year/period 563,751 962,477 - -

- (over)/under provision in prior financial period/year (27,433) 5,726 - -

Income tax expense recognised in profit or loss 536,318 968,203 - -



10. INCOME TAX EXPENSE (CONTINUED)

The reconciliations from the tax amount at statutory income tax rate to the Group’s and the Company’s tax expense are as follows:

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Loss before tax (468,716,437) (605,984,352) (369,853,195) (308,616,663)

Tax at the Malaysian statutory income tax rate of 24% (2017: 24%) (112,491,945) (145,436,244) (88,764,767) (74,067,999)

Effect of share of results of associates (15,459) (634,944) - -

Effect of share of results of joint ventures 28,664,854 34,270,616 - -

Tax effect of non-deductible expenses 94,020,740 84,396,665 98,345,847 64,725,221

Tax effect of non-taxable income (14,635,288) (1,379,495) (11,349,444) (3,905,365)

Different tax rates in offshore companies * - 113,373 - -

Deferred tax asset not recognised during the financial year/period 5,020,849 29,632,506 1,768,364 13,248,143

(Over)/under provision in prior financial period/year:

- current tax (27,433) 5,726 - -

Income tax expense 536,318 968,203 - -

* The income tax expense for certain subsidiaries incorporated in the Federal Territory of Labuan is based on the Labuan Business Activity Tax Act, 1990 which is computed at 3% of profit before tax or fixed sum of RM20,000 upon election.

Domestic income tax is calculated at the Malaysian statutory income tax rate of 24% (2017: 24%) of the estimated assessable profit for the financial year/period. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

11. LOSS PER SHARE

Basic loss per share

Basic loss per share are based on the loss for the financial year/period attributable to owners of the Company and the weighted average number of ordinary shares outstanding (excluding treasury shares) during the financial year/period.

Diluted loss per share

Diluted loss per share amounts are based on the loss for the financial year/period attributable to owners of the Company and the weighted average number of ordinary shares outstanding (excluding treasury shares) during the financial year/period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.



11. LOSS PER SHARE (CONTINUED)

Basic loss per share and diluted loss per share are calculated based on the following information:

Group

Year ended

30.6.2018 RM


30.6.2017 RM

Loss attributable to owners of Company (455,622,618) (560,430,782)

Group/Company



30.6.2017

Number of shares (‘000)

Weighted average number of ordinary shares for basic loss per share 1,260,472 1,241,525

Weighted average number of ordinary shares for diluted loss per share 1,260,472 1,241,525

During the current financial year, the diluted loss per share is the same as basic loss per share as the assumed potential new

ordinary shares are anti-dilutive.


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12. PLANT AND EQUIPMENT (CONTINUED)

Company2018

Motor vehicles

RM Renovation

RM

Office equipment,

furniture and fittings

RM

Computer and

software RM

Total RM

Costs

At 1 July 2017 620,106 134,201 191,133 686,787 1,632,227

Additions - 3,760 3,800 900 8,460

At 30 June 2018 620,106 137,961 194,933 687,687 1,640,687

Accumulated depreciation

At 1 July 2017 537,425 104,032 115,501 556,734 1,313,692

Depreciation charge for the financial year 82,680 13,848 18,420 107,032 221,980

At 30 June 2018 620,105 117,880 133,921 663,766 1,535,672

Net carrying amount

At 30 June 2018 1 20,081 61,012 23,921 105,015

2017

Costs

At 1 January 2016 620,106 134,201 190,316 633,727 1,578,350

Additions - - 817 53,060 53,877

At 30 June 2017 620,106 134,201 191,133 686,787 1,632,227

Accumulated depreciation

At 1 January 2016 351,393 83,902 87,098 326,344 848,737

Depreciation charge for the financial period 186,032 20,130 28,403 230,390 464,955

At 30 June 2017 537,425 104,032 115,501 556,734 1,313,692

Net carrying amount

At 30 June 2017 82,681 30,169 75,632 130,053 318,535



12. PLANT AND EQUIPMENT (CONTINUED)

(a) The carrying amount of assets under a finance lease arrangements are as follows:

Group/Company

2018 RM

2017 RM

Motor vehicles

Net carrying amount 1 82,681

(b) The carrying amount of plant and equipment of the Group that have been pledged as securities for bank guarantee and credit facilities granted to certain subsidiaries as disclosed in Note 25 are as follows:

Group

2018 RM

2017 RM

Jack-up rig, MOPU and Marine vessels

Net carrying amount 661,807,945 1,051,300,014

(c) Impairment loss

During the financial year/period, the Group assessed the recoverable amount of its Jack-up rig, MOPU, marine vessels and equipment in view of the persistently weak crude oil prices which have adversely affected the demand for and charter rates of the Group’s operating assets. The assessment was performed by the management by reference to an independent valuation carried out by a professional valuer which led to the recognition of an impairment loss of RM276,648,810 (2017: RM186,324,561) in the consolidated statement of profit or loss in other expenses line item.

The estimated recoverable amount of RM589,269,088 (2017: RM967,395,260) of the assets in the production units, marine vessels and drilling units segments is determined using fair value less costs of disposal, which is based on combination of market, cost and income approach, by reference to independent valuation carried out by professional valuer. The fair value is within Level 3 of the fair value hierarchy. The key assumptions used in estimating the fair value are the historical disposal price of similar asset, cost of rebuilding the same specification of the assets and day rates.

13. INTANGIBLE ASSET

Group/Company Golf club membership

2018 RM

2017 RM

Cost

At 1 July/30 June 75,000 75,000

Net carrying amount

At 30 June 75,000 75,000



14. INVESTMENTS IN SUBSIDIARIES

Company

2018 RM

2017 RM

At cost

Unquoted shares 81,861,393 81,861,393

Share options granted under ESOS 504,955 471,125

Quasi loans 564,259,398 565,689,038

646,625,746 648,021,556

Less: Allowance for impairment losses (257,779,032) (39,035,494)

388,846,714 608,986,062

Quasi loans represent advances and payments made on behalf of which the settlement is neither planned nor likely occur

in the foreseeable future. These amounts are, in substance, a part of the Company’s net investment in the subsidiaries. The quasi loans are stated at cost less accumulated impairment losses, if any.

Details of the subsidiaries are as follows:

Name of company

Principal place of business/ Country of incorporation Principal activities

Effective ownership interest/

Voting rights

2018 2017

Romilly (M) Sdn. Bhd. Malaysia Dormant 100% 100%

Alpha Perisai Sdn. Bhd. Malaysia Provision of administrative support services

100% 100%

# Corro-Pro (L) Inc. Labuan, Malaysia Dormant 100% 100%

Perisai Offshore Sdn. Bhd. Malaysia Provision of offshore oil and gas services in upstream oil sectors

51% 51%

Corro-Shield (SEA) Sdn. Bhd.

Malaysia Dormant 100% 100%

# Perisai Capital (L) Inc. Labuan, Malaysia A special purpose vehicle for the procurement of funds

100% 100%

Perisai Production Holdings Sdn. Bhd.

Malaysia Investment holding 100% 100%



Name of company



Voting rights

2018 2017

Perisai Drilling Holdings Sdn. Bhd. Malaysia Investment holding 100% 100%

Intan Offshore Sdn. Bhd. Malaysia Investment holding 51% 51%

Larizz Energy Services Sdn. Bhd. Malaysia Provision of upstream oil and gas services and other services in the oil and gas sectors

51% 51%

Subsidiaries of Perisai Production Holdings Sdn. Bhd.

# Garuda Energy (L) Inc. Labuan, Malaysia Chartering of offshore assets which are primarily for oil and gas industry.

100% 100%

Perisai Production Operations Sdn. Bhd.


Perisai Production Services Sdn. Bhd.


Subsidiaries of Perisai Drilling Holdings Sdn. Bhd.

Perisai Drilling Sdn. Bhd. Malaysia Operations and maintenance for jack-up rig

100% 100%

# Perisai Pacific 101 (L) Inc. Labuan, Malaysia Chartering of offshore assets which are primarily for oil and gas industry

100% 100%

# + Perisai Pacific 102 (L) Inc. Labuan, Malaysia Chartering of offshore assets which are primarily for oil and gas industry.

0% 100%

14. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Details of the subsidiaries are as follows: (Continued)



Name of company



Voting rights

2018 2017

# Perisai Pacific 103 (L) Inc. Labuan, Malaysia Chartering of offshore assets which are primarily for oil and gas industry.

100% 100%

Perisai Drilling Operations Sdn. Bhd.


Perisai Drilling Services Sdn. Bhd. Malaysia Dormant 100% 100%

Subsidiaries of Intan Offshore Sdn. Bhd.

Lewek Eagle Offshore Sdn. Bhd. Malaysia Dormant 51% 51%

Jade Offshore Sdn. Bhd. Malaysia Dormant 51% 51%

* Lewek Swift Shipping Pte. Ltd. Republic of Singapore Dormant 51% 51%

# Intan Offshore (L) Ltd. Labuan, Malaysia Provision of vessels and equipment on vessels chartering services

51% 51%

Lewek Mallard Offshore Sdn. Bhd. Malaysia Dormant 51% 51%

* Sarah Pearl Shipping Pte. Ltd. Republic of Singapore Dormant 51% 51%

# Audited by a firm of chartered accountant affiliated with Messrs. Baker Tilly Monteiro Heng.* Audited by Messrs. Baker Tilly Monteiro Heng for the purpose of consolidation in the financial statements of the Group.+ The company wound up and deconsolidated during the financial year.

(a) Winding up of Perisai Pacific 102 (L) Inc. (“PP102”)

On 11 October 2017, the Court has granted order that PP102 be wound up by the Court under the provisions of the Companies Act 2016. The Director General of Insolvency was appointed as the Liquidator of PP102 and the costs of and incidental to this exercise will be paid out of the assets of PP102.

The effective date for the winding up and liquidation process commenced on 11 October 2017.


Details of the subsidiaries are as follows: (Continued)




(b) Non-controlling interests (“NCI”) in subsidiaries

The financial information of the Group’s subsidiaries that have material NCI are as follows:

2018

Intan Offshore Sdn. Bhd.

and its subsidiaries

RM

Individually immaterial

subsidiaries RM

Total RM

NCI percentage of ownership interest and voting interest 49%

Carrying amount of NCI 96,426,603 1,816,187 98,242,790

(Loss)/Profit allocated to NCI (14,577,111) 946,974 (13,630,137)

Total comprehensive (loss)/income allocated to NCI (21,482,714) 883,900 (20,598,814)

2017

NCI percentage of ownership interest and voting interest 49%

Carrying amount of NCI 117,909,317 932,287 118,841,604

(Loss)/Profit allocated to NCI (47,836,681) 1,314,908 (46,521,773)

Total comprehensive (loss)/income allocated to NCI (48,605,222) 1,312,539 (47,292,683)

(c) Summarised financial information of material NCI

The summarised financial information (before intra-group elimination) of Intan Offshore Sdn. Bhd. and its subsidiaries (“Intan Offshore Group”) that have material NCI are as follows:

Intan Offshore Group

2018 RM

2017 RM

Summarised statement of financial position

Non-current assets 174,562,442 216,396,123

Current assets 156,222,141 160,899,113

Non-current liabilities (9,891,875) (10,520,300)

Current liabilities (124,076,388) (126,112,811)

Net assets 196,816,320 240,662,125

Summarised statement of comprehensive income

Revenue 13,124,321 90,650,597

Loss for the financial year/period (29,749,204) (97,625,879)

Total comprehensive loss (43,845,053) (99,163,465)

Summarised cash flow information

Cash flows from operating activities (26,951) 12,616,491

Cash flows from investing activities 153,256 674,356

Cash flows used in financing activities - (13,522,304)

Net decrease in cash and cash equivalents 126,305 (231,457)

Dividends paid to NCI - -




(d) Significant restrictions

The covenants of the bank term loans taken by Perisai Pacific 101 (L) Inc., Garuda Energy (L) Inc. and Intan Offshore (L) Ltd., the subsidiaries of the Company, restrict the ability of the subsidiaries to provide advances to other companies within the Group and to declare dividends to their shareholders until full settlement of the loans unless their prior written consent are obtained. The assets to which such restrictions apply are the cash and cash equivalents of those subsidiaries included in the consolidated financial statements amounting to RM9,033,107 (2017: RM9,546,939).

15. INVESTMENTS IN ASSOCIATES

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Unquoted shares at cost 17,676,000 17,676,000 17,676,000 17,676,000

Share of post-acquisition loss, net of dividend received (16,889,752) (16,144,165) - -

Share of exchange differences 351,358 445,470 - -

1,137,606 1,977,305 17,676,000 17,676,000

Less: Accumulated impairment loss - - (17,376,000) (17,376,000)

1,137,606 1,977,305 300,000 300,000

Details of the associates are as follows:

Name of company

Principal place of business/Country of incorporation

Principal activities/ Nature of the relationship


Voting rights Financial year end 2018 2017

Held by the company

Phoenix Energy Sdn. Bhd. Malaysia Dormant 32% 32% 31 December

Larizz Petroleum Services Sdn. Bhd.

Malaysia Provision of upstream oil and gas services and is an agent for the Group

40% 40% 31 December

All associates are accounted for using the equity method in the consolidated financial statements.

The Group has not recognised losses related to Phoenix Energy Sdn. Bhd. totalling RM575 (2017: RM2,289) in the current financial year/period and RM308,850 (2017: RM308,275) cumulatively, since the Group has no obligation in respect of these losses.



15. INVESTMENTS IN ASSOCIATES (CONTINUED)

(a) Summarised financial information of material associate

The summarised financial information of the Group’s material associate is as follows:

Group

Larizz Petroleum

Services Sdn. Bhd.

RM

2018

Assets and liabilities:

Non-current assets 266,577

Current assets 24,039,742

Current liabilities (21,462,304)

Net assets 2,844,015

Results:

Revenue 767,931

Profit for the financial year 161,033

Total comprehensive income (74,248)

2017

Assets and liabilities:

Non-current assets 213,895

Current assets 70,500,752

Non-current liabilities (8,167)

Current liabilities (65,763,216)

Net assets 4,943,264

Results:

Revenue 9,744,515

Profit for the financial period 6,681,204

Total comprehensive income 6,439,978



15. INVESTMENTS IN ASSOCIATES (CONTINUED)

(b) Reconciliation of net assets to carrying amount of the material associate

The reconciliation of net assets to carrying amount of the Group’s material associate is as follows:

Larizz Petroleum

Services Sdn. Bhd.

RM

2018

Group’s share of net assets 1,137,606

Carrying amount in the consolidated statement of financial position 1,137,606

Group’s share of results:

Group’s share of profit or loss 64,413

Group’s share of other comprehensive loss (94,112)

Group’s share of total comprehensive loss (29,699)

Dividend received from associates 810,000

2017

Group’s share of net assets 1,977,305

Carrying amount in the consolidated statement of financial position 1,977,305


Group’s share of profit or loss 2,645,599

Group’s share of other comprehensive loss (69,608)

Group’s share of total comprehensive income 2,575,991

Dividend received from associates 3,018,000



16. INVESTMENTS IN JOINT VENTURES

Group Company

2018 2017 2018 2017

RM RM RM RM

Unquoted shares at cost 485,302,776 485,302,776 93,918,740 93,918,740

Share of post-acquisition losses (191,655,198) (72,218,308) - -

Share of exchange differences 133,516,661 162,402,893 - -

427,164,239 575,487,361 93,918,740 93,918,740

Quasi loan 28,900,004 30,728,425 28,900,003 30,728,425

456,064,243 606,215,786 122,818,743 124,647,165

Less: Allowance for impairment loss (59,209,192) (59,209,192) (93,918,740) (52,635,622)

396,855,051 547,006,594 28,900,003 72,011,543

Quasi loan represents advances and payments made on behalf of which the settlement is neither planned nor likely occur in

the foreseeable future. This amount is, in substance, a part of the Company’s net investment in the joint ventures. The quasi loan is stated at cost less accumulated impairment losses, if any.

All joint ventures are accounted for using the equity method in the consolidated financial statements.

Details of the joint ventures are as follows:

Name of company

Principal place of business/Country of incorporation

Principal activities/ Nature of the relationship


Voting rights Financial year end 2018 2017

Held by the Company

# * SJR Marine (L) Ltd. Labuan, Malaysia Provision of vessels, barges and equipment on vessels charter services

51% 51% 30 June

Held by Perisai Production Holdings Sdn. Bhd.

# Emas Victoria (L) Bhd. Labuan, Malaysia Ship owners and provision of ship chartering services

51% 51% 30 June

* Victoria Production Services Sdn. Bhd.

Malaysia Operations and maintenance service for Floating, Production, Storage and Offloading (“FPSO”)

51% 51% 31 December



16. INVESTMENTS IN JOINT VENTURES (CONTINUED)

Details of the joint ventures are as follows (Continued):

# Audited by a firm of chartered accountant affiliated with Messrs. Baker Tilly Monteiro Heng.* Audited by Messrs. Baker Tilly Monteiro Heng for purpose of consolidation in the financial statements of the Group.

(a) Investment in SJR Marine (L) Ltd.

Simultaneous with the disposal of 49% equity interest in SJR Marine (L) Ltd. (“SJR Marine”), on 5 December 2012, the Company and EMAS Offshore Limited (“EOL”) entered into the following supplementary agreement to the Share Sale Agreement (‘SSA’):

(i) the Company grants EOL the right to acquire all of the Company’s remaining equity interest in SJR Marine (the “Call Option Shares”) from the Company, and EOL may exercise the Call Option at the Call Option Price at any time during the two (2)-year period from the completion date of the disposal of 49% equity in SJR Marine (“Completion Date”) (“Call Option Period”). The Call Option Price is fixed at the price equivalent to 51% of the net assets value of SJR Marine at the Completion Date;

(ii) in the event the Call Option is not exercised during the Call Option Period, the parties shall use their best endeavours to procure SJR Marine to sell SJR Marine’s Enterprise 3 vessel to an interested third party within a period of twelve (12) months from the expiry of the Call Option Period (“Enterprise 3 Disposal Period”) on terms to be agreed upon by the parties. Where SJR Marine is unable to dispose of Enterprise 3 within the Enterprise 3 Disposal Period, the Company shall be entitled to exercise its right under the Put Option; and

(iii) EOL granted the Company the right (“Put Option”) to sell all of its remaining equity interest in SJR Marine (“Put

Option Shares”) to EOL, and EOL shall acquire the Put Option Shares, at the Put Option Price which is equivalent to the Call Option Price. The Company may exercise the Put Option at the Put Option Price at any time within the period of one (1) month prior to the expiry of the Enterprise 3 Disposal Period (“Put Option Period”). In the event the Put Option is not exercised within the Put Option Period, the Company’s Put Option Rights shall lapse.

The Call Option has lapsed on 26 December 2015.

The Company had on 8 December 2016 issued a notice of the exercise of its Put Option with the Put Option Price of USD43,031,406.55. However, the Company received a letter from EOL dated 8 December 2016 notifying the Company that following the occurrence of certain events as alleged by EOL, EOL is terminating the Shareholder’s Agreement entered into between the Company and EOL and EOL also intends to terminate the SSA in accordance with the terms of the SSA.

On 23 December 2016, the Company had entered into a Settlement Agreement with EOL (“Proposed Settlement Agreement”) to achieve a full and final settlement of the disputes, differences, claims, and counterclaims against each other arising from or in connection with the SSA and the Put Option at an agreed consideration of USD43,031,406.55 for the Put Option Shares. The settlement of the Put Option is subject to the terms and conditions stated in the Proposed Settlement Agreement.

On 14 August 2017, the Company requested for a confirmation from EOL on the status of the Conditions Precedents to be fulfilled by EOL. EOL had on 15 August 2017 confirmed that EOL has not received any representation from its bankers which would allow EOL to conclude whether or not the Conditions Precedents would be satisfied. EOL further confirmed that the extension period be extended only up to 23 July 2017. As the extension period has since lapsed, the Proposed Settlement Agreement became ineffective.

Pursuant to the terms of the Proposed Settlement Agreement and the lapse of the Proposed Settlement Agreement, the Put Option granted by EOL to the Company pursuant to the SSA is revived accordingly.




(a) Investment in SJR Marine (L) Ltd. (Continued)

On 27 September 2017, EOL had written to the Company stating that due to the lapse of the Settlement Agreement, the Company is required to comply with the Shareholders’ Agreement dated 26 December 2013, which was terminated by EOL’s notice dated 8 December 2016 (“Termination Notice”), and the Company is obliged to complete the sale of the 51% shares in SJR Marine to EOL at the stated price of USD1.00. EOL claims that it had effected payment of USD1.00 to the Company and is awaiting for the Company’s completion documents to be delivered to them. The Company had already disputed the Termination Notice by its letter to EOL dated 8 December 2016 and maintains that the alleged termination is invalid and ineffective.

On 4 July 2018, the Company serves a Notice of Assignment to EOL in relation to the Assigned Rights (as defined herein below):-

(i) By a Deed of Assignment dated 2 February 2018 made by the Company in favour of Perisai Production Holdings Sdn. Bhd. (“PPHSB”), the Company has assigned to PPHSB the proceeds of the Put Option (equivalent to the sum of USD43,031,406.55) and the rights and entitlement to claim for such proceeds which are now owing and due from EOL to the Company pursuant to the Company’s exercise of the right to sell of the remaining equity interest in SJR Marine, representing 51% of the equity interest in SJR Marine, vide the Put Option Notice dated 8 December 2016 (“Put Option”)(“Assigned Rights”).

(ii) that EOL is irrevocably authorised and instructed to pay to PPHSB all sums which are due to pay by EOL to the

Company pursuant to exercise of the Put Option.

The Group has not recognised losses related to SJR Marine (L) Ltd totalling RM21,665,504 (2017: RMnil) in the current financial year/period and RM21,665,504 (2017: RMnil) cumulatively, since the Group has no obligation in respect of these losses.

(b) Investment in Emas Victoria (L) Bhd. (“EVLB”)

On 15 January 2018, Perisai Production Holdings Sdn. Bhd. (“PPHSB”), a wholly-owned subsidiary of Perisai has written to the Company secretary of Emas Victoria (L) Bhd. (“EVLB”) to serve a notice that a termination event has occurred enabling PPHSB to terminate the shareholder agreement dated 21 August 2013.

In light of the default, pursuant to PPHSB’s rights under shareholder agreement with EOL and EVLB (“EVLB SHA”), PPHSB required EOL to sell 37,333,604 ordinary shares held by EOL in EVLB to PPHSB at the price of USD1.00, which completion shall take place at the registered office of EVLB. On 29 January 2018, EOL denies having committed any event of default and asserted that it remains as a shareholder in EVLB. The claim by PPHSB under the EVLB SHA is therefore disputed by EOL.

EOL requires the Company Secretary of EVLB to appoint a Valuer to procure the Valuation Price for the Default Shares as the Option Price of USD1 is also disputed by EOL.

The Company Secretary of EVLB had confirmed that a Valuer will be appointed accordingly for such purpose.




(c) Summarised financial information of material joint ventures

The following table illustrates the summarised financial information of the Group’s material joint ventures, adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Group’s interest in the joint ventures:

Emas Victoria (L) Bhd.

RM

Victoria Production

Services Sdn. Bhd.

RM

SJR Marine (L) Ltd.

RM Total

RM

2018

Asset and liabilities:

Non-current assets 1,138,978,750 53,961 138,098,654 1,277,131,365

Current assets 41,979,846 2,693,090 722,280 45,395,216

Current liabilities (462,041,087) (184,330) (184,635,076) (646,860,493)

Net assets/(liabilities) 718,917,509 2,562,721 (45,814,142) 675,666,088

Included in the assets and liabilities are:

Cash and cash equivalents 33,248,066 1,399,200 11,341 34,658,607

Current financial liabilities (excluding trade, other payables and provisions) 431,534,763 816 178,443,389 609,978,968

Results:

Loss for the financial year (116,068,733) (39,643,029) (120,959,599) (276,671,361)

Other comprehensive loss (51,886,204) (2,284,394) (2,469,075) (56,639,673)

Total comprehensive loss (167,954,937) (41,927,423) (123,428,674) (333,311,034)

Included in the total comprehensive income is:

Revenue 6,784,882 200,586 - 6,985,468

Depreciation 51,736,852 15,158 14,942,816 66,694,826

Interest expense 28,666,124 - 1,370,577 30,036,701

Income tax expense 24,455 1,305,341 - 1,329,796

Reconciliation of net assets to carrying amount:

Group’s share of net assets 366,647,930 1,306,988 - 367,954,918

Fair value adjustments - 129 - 129

Carrying amount in the consolidated statement of financial position 366,647,930 1,307,117 - 367,955,047


Profit or loss (59,195,054) (20,217,945) (40,023,891) (119,436,890)

Other comprehensive (loss)/income (26,461,964) (1,165,041) (1,259,228) (28,886,233)

Total comprehensive (loss)/income (85,657,018) (21,382,986) (41,283,119) (148,323,123)




(c) Summarised financial information of material joint ventures (Continued)

The following table illustrates the summarised financial information of the Group’s material joint ventures, adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Group’s interest in the joint ventures (Continued):


RM

Victoria Production

Services Sdn. Bhd.

RM

SJR Marine (L) Ltd.

RM Total

RM

2017

Asset and liabilities:

Non-current assets 1,296,358,600 295,876 273,606,149 1,570,260,625

Current assets 212,242,462 56,539,651 1,053,014 269,835,127

Current liabilities (621,728,616) (12,272,630) (193,711,870) (827,713,116)

Net assets 886,872,446 44,562,897 80,947,293 1,012,382,636

Included in the assets and liabilities are:

Cash and cash equivalents 167,626,122 29,809,264 3,637 197,439,023

Current financial liabilities (excluding trade, other payables and provisions) 581,988,321 3,814,753 186,641,784 772,444,858

Results:

(Loss)/Profit for the financial year (187,930,100) 28,836,102 (120,894,696) (279,988,694)

Other comprehensive (loss)/income (2,897,353) 476,871 (1,966,741) (4,387,223)

Total comprehensive (loss)/income (190,827,453) 29,312,973 (122,861,437) (284,375,917)

Included in the total comprehensive income is:

Revenue 339,254,891 99,329,034 - 438,583,925

Depreciation 220,187,342 192,824 24,718,934 245,099,100

Interest expense 40,037,526 - 3,477,642 43,515,168

Income tax expense 50,915 7,751,478 18,784 7,821,177




(c) Summarised financial information of material joint ventures (Continued)

The following table illustrates the summarised financial information of the Group’s material joint ventures, adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Group’s interest in the joint ventures (Continued):


RM

Victoria Production

Services Sdn. Bhd.

RM

SJR Marine (L) Ltd.

RM Total

RM

2017

Reconciliation of net assets to carrying amount:

Group’s share of net assets 452,304,947 22,690,102 40,142,373 515,137,422

Fair value adjustments - - 1,140,746 1,140,746

Carrying amount in the consolidated statement of financial position 452,304,947 22,690,102 41,283,119 516,278,168


Profit or loss (95,844,351) 14,706,412 (61,656,296) (142,794,235)

Other comprehensive (loss)/income (1,477,650) 243,204 (1,003,038) (2,237,484)

Total comprehensive (loss)/income (97,322,001) 14,949,616 (62,659,334) (145,031,719)

(d) Significant restrictions

The above joint ventures cannot distribute their profits or repay advances made by the Company unless consents are obtained from the joint venture partner and its related banks under the loan covenant.

17. TRADE RECEIVABLES

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Trade receivables

- Billed 143,205,837 135,135,739 373,624 1,498,322

- Unbilled 4,515,828 7,772,653 - -

147,721,665 142,908,392 373,624 1,498,322

Less: Allowance for impairment loss (119,079,207) (112,505,198) (373,624) (1,497,796)

28,642,458 30,403,194 - 526

Trade receivables of the Group and of the Company are non-interest bearing and generally on credit terms ranging from 15 to 120 days (2017: 30 to 120 days) except for an amount of RM14,345,690 (2017: RM13,784,951) which bear interest rates ranging from 3.31% to 4.35% (2017: 2.28% to 3.22%). They are recognised at their original invoices amounts which represent their fair value on initial recognition.



17. TRADE RECEIVABLES (CONTINUED)

Included in trade receivables of the Group is an amount of RM126,775,169 (2017: RM120,668,810) due from affiliated companies on normal credit term.

Included in trade receivables of the Company are amounts due from subsidiaries of RMnil (2017: RM526).

Ageing analysis of trade receivables The ageing analysis of the Group’s and the Company’s trade receivables are as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Neither past due nor impaired 10,231,320 23,757,513 - 526

1 to 30 days past due not impaired 8,322,287 6,645,681 - -

31 to 60 days past due not impaired 806,284 - - -

61 to 90 days past due not impaired 1,040,899 - - -

91 to 120 days past due not impaired 344,948 - - -

More than 120 days past due not impaired 7,896,720 - - -

18,411,138 6,645,681 - -

Impaired 119,079,207 112,505,198 373,624 1,497,796

147,721,665 142,908,392 373,624 1,498,322

Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the

Group and the Company.

Receivables that are past dues not impaired The Group have trade receivables amounting to RM18,411,138 (2017: RM6,645,681) respectively that are past due at the reporting

date but not impaired because there have been no significant changes in the credit quality of the debtors and the amounts are still considered recoverable. The Group does not hold any collateral or other credit enhancements over these balances.

Receivables that are impaired The movement of allowance accounts used to record the impairment is as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

At beginning of financial year/period 112,505,198 2,356,414 1,497,796 -

Charge for the financal year/period (Note 6) 13,933,481 108,363,150 42,156 1,497,796

Reversal (Note 6) (512,920) - (680,681) -

Written off - - (485,647) -

Exchange differences (6,846,552) 1,785,634 - -

At end of financial year/period 119,079,207 112,505,198 373,624 1,497,796



17. TRADE RECEIVABLES (CONTINUED)

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulty and have defaulted on payment. These receivables are not secured by any collateral or credit enhancements.

The foreign currency exposure profile of trade receivables balances is as follows:

Company

2018 RM

2017 RM

United States Dollar 364,668 1,498,322

18. OTHER RECEIVABLES AND DEPOSITS

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Non-current

Non-trade

Amounts due from subsidiaries - - 420,835,791 696,418,325

Less: Allowance for impairment loss - - (420,835,791) (696,418,325)

- - - -

Current

Non-trade

Sundry receivables 47,940 510,775 91,921 55,857

GST refundable 4,648,778 1,761,946 157,227 24,003

Insurance receivable 5,034,791 5,034,791 - -

Interest receivable from subsidiaries - - 78,442,078 68,889,758

Amount due from an associate 118,725 118,725 118,725 118,725

Amount due from subsidiary - - 189,615 189,585

Amounts due from joint ventures 55,984,205 59,554,700 55,816,698 59,330,682

Amount due from affiliated company 905,545 - - -

66,739,984 66,980,937 134,816,264 128,608,610

Less: Allowance for impairment loss (57,027,244) (118,725) (134,585,885) (69,198,068)

9,712,740 66,862,212 230,379 59,410,542

Deposits 540,888 663,152 96,044 109,192

10,253,628 67,525,364 326,423 59,519,734

10,253,628 67,525,364 326,423 59,519,734



18. OTHER RECEIVABLES AND DEPOSITS (CONTINUED)

Non-current: The amounts due from subsidiaries are non-trade in nature, unsecured, not expected to be repayable within the next 12

months and bear interests at rates ranging from 4.85% to 10.15% (2017: 2.99% to 10.15%) per annum. These amounts are neither past due nor impaired.

Current: The amounts due from subsidiaries, associate and joint ventures are non-trade in nature, unsecured, interest free and

repayable on demand by cash. The amounts are neither past due nor impaired.

Insurance receivable represents reimbursement amount from insurance contracts on the third parties’ claims as further disclosed in Note 37.

The movements of the allowance accounts used to record the impairment loss on other receivables are as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Non-current

At 1 July/ 1 January - - 696,418,325 633,695,777

Charge for the financial period (Note 6) - - - 62,722,548

Reversal (Note 6) - - (51,907,858) -

Written off - - (223,674,676) -

At 30 June - - 420,835,791 696,418,325

Current

At 1 July/ 1 January 118,725 118,725 69,198,068 622,678

Charge for the financial year/period (Note 6) 56,917,109 - 76,305,819 68,575,390

Written off - - (10,918,002) -

Exchange difference (8,590) - - -

At 30 June 57,027,244 118,725 134,585,885 69,198,068

The foreign currency exposure profile of other receivables is as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Ringgit Malaysia 5,746,287 5,034,791 - -

United States Dollar 55,816,698 59,554,700 555,094,567 824,638,765



19. PREPAYMENTS

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Prepayments 763,474 492,751,923 61,236 84,298

Less: Accumulated impairment loss

At beginning of financial year/period (491,274,329) (463,374,523) - -

Charge for the financial year/period (Note 6) - (28,556,511) - -

Written off 477,993,552 - - -

Exchange difference 13,280,777 656,705 - -

At end of the financial year/period - (491,274,329) - -

763,474 1,477,594 61,236 84,298

In previous financial period, non-current prepayments of the Group represent down payments for construction of jack-up drilling rigs and other related costs. The balance of the capital commitment is disclosed in Note 31. Included in prepayments are capitalised borrowing costs during the previous financial period amounting to RM7,306,923 using the capitalisation rates ranging 3.35% to 10.15% per annum.


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20. SHARE CAPITAL, SHARE PREMIUM AND TREASURY SHARES (CONTINUED)

(a) Share capital

The new Companies Act 2016 (the “Act”), which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. Consequently, the amount standing to the credit of the share premium account of RM644,801,092 becomes part of the Company’s share capital pursuant to the transitional provisions set out in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of the Act, use the amount standing to the credit of its share premium account of RM644,801,092 for purposes as set out in Section 618(3) of the Act. There is no impact on the number of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition.

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

(b) Share premium

In previous financial period, share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the shares. Pursuant to Section 618(2) of the Act, the sum of RM644,801,092 standing to the credit of the Company’s share premium account has been transferred and became part of the Company’s share capital as disclosed in Note 20(a).

(c) Treasury shares

Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance.

The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares.

There was no repurchase of issued share capital since the previous financial period end.

21. OTHER RESERVES

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Share options reserve 23,587,923 31,177,530 23,587,923 31,115,145

Foreign currency translation reserve 259,199,219 293,056,671 - -

282,787,142 324,234,201 23,587,923 31,115,145



21. OTHER RESERVES (CONTINUED)

(a) Share options reserve

Share options reserve represents the equity-settled share options granted to employees (Note 29). This reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options.

(b) Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of the entities within the Group with functional currencies other than RM (foreign operations) as well as the foreign currency differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation or another currency.

22. TRADE PAYABLES

Trade payables are non-interest bearing and the normal trade credit term granted to the Group ranges from 30 to 90 days (2017: 30 to 90 days).

Included in the trade payables are accrued purchases of RM9,835,066 (2017: RM10,672,499).

The foreign currency exposure profile of trade payables is as follows:

Group

2018 2017

RM RM

Ringgit Malaysia 1,906,535 2,470,398

Singapore Dollar 3,256,413 1,968,265



23. OTHER PAYABLES AND ACCRUALS

Group Company

2018 2017 2018 2017

Note RM RM RM RM

Non-current

Amount due to an affiliated company (a) 9,891,875 10,520,300 - -

Current

Sundry payables (b) 25,585,222 61,204,109 8,112,089 8,652,070

Interest payables 93,845,930 49,162,311 89,920,184 57,160,233

GST payables 3,740,801 5,289,832 - -


Amounts due to subsidiaries (c) - - 543,876,587 576,521,476

Amount due to an associate 15,900 - 15,900 -

Accruals 2,618,047 2,327,740 1,331,966 842,240

Deposits received (d) - 122,768 23,000 23,000

125,805,900 118,106,760 779,342,631 731,953,825

(a) The amount due to an affiliated company in respect of acquisition of plant and equipment is unsecured, interest free and repayable in year 2020 by cash.

(b) Included in sundry payables of the Group and the Company are:

(i) an amount of RM13,526,937 (2017: RM39,107,802) due to a supplier pursuant to the Rig Construction Contracts for 1 rig (2017: 2 rigs) under construction;

(ii) an amount of RM1,928,094 (2017: RM1,996,086) due to EMAS Offshore Limited, a joint venture partner of the Group of which RM1,256,065 (2017: RM1,335,862) bears interest at rate of 4% (2017: 4%) per annum; and

(iii) an amount of RM53,612 and RM1,179 respectively (2017: RM57,018 and RM1,254) due to affiliated companies.

The above amounts due to joint venture partner and affiliated companies are non-trade in nature, unsecured, interest free and repayable on demand by cash.

(c) The amounts due to subsidiaries are non-trade in nature, unsecured, interest free and no fixed term of repayment except for an amount of RM478,556,614 (2017: RM505,297,844) which bear interest at rates ranging from 4.85% to 8.65% (2017: 3.17% to 8.65%) per annum.



23. OTHER PAYABLES AND ACCRUALS (CONTINUED)

(d) Included in deposits are rental deposits of:

(i) RM nil (2017: RM23,000) received by the Group and the Company from an affiliated company;

(ii) RM nil (2017: RM99,768) received by the Group from a joint venture company; and

(iii) RM23,000 (2017:RM nil) received by the Company from a subsidiary.

The foreign currency exposure profile of other payables are as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Ringgit Malaysia 473,504 138,295 - -

Singapore Dollar 714,878 778,187 439,229,057 427,495,768

United States Dollar 11,630,121 9,607,310 336,479,016 301,134,790

24. PROVISION

Rectification costs

RM

Onerous contract

RM

Group

At 1 January 2016 - -

Charge for the financal period 5,034,791 -

At 30 June 2017/1 July 2017 5,034,791 -

Charge for the financal year - 2,754,754

At 30 June 2018 5,034,791 2,754,754

(a) Rectification costs

This is in respect of third parties’ claims for rectification works and consultants fees. Details of unprovided claims are disclosed in Note 37.

(b) Onerous contracts

The Group entered into a non-cancellable lease for office space and stop occupying the premise during the financial year. This amount is in respect of provision for rental for unexpired term. Details are disclosed in Note 40(c).

The foreign currency exposure profile of provision is as follow:

Group

2018 2017

RM RM

Ringgit Malaysia 5,034,791 5,034,791



25. LOANS AND BORROWINGS

Group Company

Note 2018

RM 2017

RM 2018

RM 2017

RM

Unsecured

Bank overdraft (a) 5,370,595 4,765,996 5,370,595 4,765,996

Amount owing under revolving credit (b) 12,018,205 10,778,245 12,018,205 10,778,245

Revolving credits (c) 40,375,000 42,940,000 40,375,000 42,940,000

Medium Term Notes

- Singapore Dollar (“SGD”) (d) 370,312,500 389,850,000 - -

428,076,300 448,334,241 57,763,800 58,484,241

Secured

Term loans

- United States Dollar (“USD”) (e) 801,420,100 869,534,992 - -

801,420,100 869,534,992 - -

1,229,496,400 1,317,869,233 57,763,800 58,484,241

(a) Unsecured bank overdraft

The bank overdraft of the Group and of the Company bears interest at rate of 10.15% (2017: 10.15%) per annum.

(b) Amount owing under revolving credit

In the previous financial period, the Group and the Company defaulted on the payment of interest on a revolving credit facility. Consequently, the revolving credit was not rolled-over and became due for immediate repayment. The outstanding amount bore interest at a rate of 10.15% (2017: 10.15%) per annum.

(c) Unsecured revolving credits

The revolving credits of the Group and of the Company bear interest rate at rates ranging from 4.85% to 5.87% (2017: 3.36% to 4.71%) per annum.

The foreign currency exposure profile of unsecured revolving credits of the Group and of the Company is as follows:

Group/Company

2018 2017

RM RM

United States Dollar 40,375,000 42,940,000



25. LOANS AND BORROWINGS (CONTINUED)

(d) Unsecured Medium Term Notes

On 19 August 2013, Perisai Capital (L) Inc. (“PCLI”), a wholly-owned subsidiary of the Company, established a Multi-currency Medium Term Notes (“MTN”) Programme arranged by Credit Suisse (Singapore) Limited to issue MTN up to SGD700,000,000. The net proceeds from the issuance of the MTN is expected to be on-lent and/or paid and/or advanced by PCLI to the Company for general corporate purpose of the Company and its subsidiaries including to finance potential acquisition, strategic expansion, general working capital, capital expenditure, investment and to refinance existing borrowings of the Company and its subsidiaries.

On 3 October 2013, PCLI issued the MTN amounting to SGD23,000,000, maturing on 3 October 2016 bearing interest at rate of 6.88% per annum. On 18 July 2014, PCLI issued additional MTN amounting to SGD102,000,000, maturing on 3 October 2016 bearing interest rate of 6.88% per annum. The MTNs are listed on the Singapore Exchange Trading Limited (“SGX-ST”).

The salient features of the MTN Programme are as follows:

(i) PCLI may, subject to compliance with all relevant laws, regulations and derivatives, from time to time issue MTN in series or tranches denominated in SGD and/or any other currency as may be agreed between the relevant dealer(s) and PCLI.

(ii) Each series of tranche of MTN may be issued in various amounts and tenors, and may bear fixed, floating, variable or hybrid rates of interest or may not bear interest.

(iii) The payment obligations of PCLI under the MTN and certain other obligations under the documents pursuant to the MTN Programme (“Programme Documents”) will be unconditionally and irrevocably guaranteed by the Company in accordance with the provisions of the applicable Programme Documents.

(iv) The MTN and the coupons of all series will constitute direct, unconditional, unsubordinated and unsecured obligations of PCLI and shall at all times rank pari passu, without any preference or priority among themselves, and pari passu with all other present and future unsecured obligations (other than subordinated obligations and priorities created by law) of PCLI.

(v) The MTN to be issued will be quoted on the SGX-ST pursuant to the MTN Programme.

The Company and PCLI, have both received a notice dated 10 October 2016 from the Trustee of the MTN notifying that an event of default for payment of principal and interest of the MTN has occurred as PCLI failed to pay the principal and interest due on the MTN on 3 October 2016. On 18 October 2016, the Company and PCLI received a notice from the Trustee notifying that the redemption amount of the MTN together with interest accrued to the date of payment are immediately due and payable and demanded immediate payment.

On 8 June 2018, the Company has obtained approval from MTN holders during the court convened meeting of scheme creditors to settle the principal and interest of MTN via distribution of Redeemable Convertible Unsecured Loan Stock and Irredeemable Convertible Unsecured Loan Stock of the Company by PCLI. The settlement is part of the proposed regularisation plan of the Company subject to the approval by Bursa Malaysia Securities Berhad.



25. LOANS AND BORROWINGS (CONTINUED)

(e) Secured term loans

The term loans of the Group, which are denominated in United States Dollar, bear interest at rates ranging from 3.95% to 4.83% (30.6.2017: 2.99% to 4.20%) per annum and are secured and supported as follows:-

(i) a legal charge over respective subsidiaries’ Jack-up rig, MOPU and marine vessels;(ii) assignment of contract proceeds from the Charter Contract and Drilling Contract of the respective subsidiaries;(iii) specific and limited debenture over the assets of the respective borrowing subsidiaries;(iv) assignment of Insurance Policies; and(v) corporate guarantees by the Company.

The event of default on MTN also gave rise to a cross default of the financing facilities with all other lenders of the Group and of the Company.

26. HIRE PURCHASE PAYABLES

Group/Company

2018 RM

2017 RM

Total instalment payable - 96,601

Less: Future finance charges - (1,601)

Present value of hire purchase payables - 95,000

Current liabilities

Payable within 1 year

Total instalment payable - 96,601

Less: Future finance charges - (1,601)

- 95,000

The hire purchase bears an interest rate at 2.25% (2017: 2.25%) per annum.



27. DEFERRED TAXATION

Deferred tax assets and deferred tax liabilities presented after appropriate offsetting as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Deferred tax assets 173,737 135,298 14,609 51,865

Deferred tax liabilities (173,737) (135,298) (14,609) (51,865)

- - - -

Deferred tax assets and liabilities are attributable to the following:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Deferred tax assets

Unabsorbed capital allowances 173,737 135,298 14,609 51,865

Deferred tax liabilities

Differences between the carrying amount of plant and equipment and its tax base 173,737 135,298 14,609 51,865

The estimated temporary differences for which no deferred tax assets have been recognised in the financial statements are

as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Unutilised tax losses 180,836,181 160,009,382 56,681,659 49,328,087

Unabsorbed capital allowances 99,795,025 99,701,621 567,757 553,148

280,631,206 259,711,003 57,249,416 49,881,235



28. CASH AND CASH EQUIVALENTS

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Cash on hand and at bank 28,385,391 16,392,276 1,318,598 1,229,421

Less: Bank overdraft (Note 25) (5,370,595) (4,765,996) (5,370,595) (4,765,996)

23,014,796 11,626,280 (4,051,997) (3,536,575)

The foreign currency exposure profile of cash and bank balances are as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Singapore Dollar 6,749 9,385 4,678 7,166

Ringgit Malaysia 16,962,856 4,257,914 - -

United States Dollar 43,415 54,365 43,338 54,095

29. EMPLOYEE BENEFITS

Employees’ share option scheme (“ESOS”)

Eligible directors and employees of the Group participate in an equity-settled, share-based compensation unissued plan, i.e. ESOS operated by the Company to subscribe for new ordinary shares in the Company.

The Company’s ESOS is governed by the by-laws approved by its shareholders at an Extraordinary General Meeting held on 27 June 2012. The Company had on 4 July 2012, 25 June 2013, 19 June 2014 and 17 June 2015, granted 25,818,000, 14,068,000, 10,997,900 and 33,383,050 new options respectively to the eligible directors and employees of the Group. The existing ESOS was implemented on 1 July 2012 to be in force for a period of 10 years which will expire on 1 July 2022.

The salient features of the ESOS are as follows:

(a) The total number of options to be offered under the ESOS shall be subject to a maximum of 10% of the issued and paid-up share capital (excluding treasury shares) of the Company at any point in time;

(b) Any natural person who is employed full-time by and on the payroll of the Company and its subsidiaries and non-executive directors who fulfils the conditions of eligibility stipulated in the by-laws shall be eligible to participate in the ESOS. Employees include the executive directors of the Group;

(c) The subscription price for each new share shall be based on the weighted average of the market price of the Company shares for the five (5) market days immediately preceding the date on which the option is granted less a discount of up to 10% or the par value of the Company share, whichever is the higher;

(d) The ESOS shall be in force for a duration of ten (10) years from its commencement;



29. EMPLOYEE BENEFITS (CONTINUED)

The salient features of the ESOS are as follows (Continued):

(e) The ESOS Committee may impose any condition or conditions on any option which they grant preventing its exercise unless such condition has been complied with. If after the ESOS Committee has imposed an Exercise Condition, an event occur which cause the ESOS Committee to consider that it is no longer appropriate, they may at their discretion, vary the Exercise Conditions;

Options which are exercisable in a particular year but are not exercised may be carried forward to subsequent years subject to the option period. All unexercised options shall be exercisable in the last year of the option period. Any options which remain unexercised at the expiry date of option period shall be automatically terminated; and

(f) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects with the existing ordinary shares of the Company except that the shares so issued will not be entitled to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to shareholders prior to the date of allotment of the new shares.

Movement of share options during the financial period/year The following table illustrates the number (“No.”) and weighted average exercise price (“WAEP”) of, and movements in, share

options during the financial year/period:

2018 2017

No. WAEP (RM) No. WAEP (RM)

At the beginning of the financial year/period 70,514,640 0.816 79,937,070 0.822

Forfeited (18,424,150) 0.810 (9,422,430) 0.873

Outstanding at the end of the financial year/period 52,090,490 0.818 70,514,640 0.816

Exercisable at the end of the financial year/period 52,090,490 0.818 60,714,808 0.883

The weighted average fair value of options granted during the financial year/period is RMnil (2017: RMnil).

Share option outstanding at the end of financial year/period have the following expiry dates and exercise prices:

Grant date Expiry date

Exercise priceper share option

RM

Share options

2018 unit

2017 unit

4 July 2012 1 July 2022 0.785 14,095,170 19,987,170

25 June 2013 1 July 2022 1.440 8,692,000 11,556,000

19 June 2014 1 July 2022 1.400 7,288,750 9,595,250

17 June 2015 1 July 2022 0.400 22,014,570 29,376,220

52,090.490 70,514,640



30. NON-CANCELLABLE OPERATING LEASE COMMITMENT

(a) Operating lease arrangements – the Group as lessee

The future aggregate lease payments under non-cancellable operating leases contracted for at the reporting date but not recognised as liabilities are as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Future rental payments:

Not later than one year 838,240 286,620 838,240 64,480

This is in respect of the non-cancellable operating lease agreements entered into by the Group and the Company

for the rental of office premises for period of 1 year and are renewable upon expiry. The leases do not include any contingent rentals.

(b) Operating lease arrangements – the Group as lessor

The Group entered into non-cancellable operating lease arrangements for the sub-rental of premises and parking lots. The lease has a tenure of three years with an option of renewal upon expiry. There are no restrictions placed upon the Group by entering into this lease.

The future minimum rental receivables under non-cancellable operating lease at the reporting date but not recognised as receivables, are as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Future rental receivables:

Not later than one year 230,000 23,000 230,000 23,000

31. CAPITAL COMMITMENTS

Group

2018 RM

2017 RM

Approved and contracted for:

- Plant and equipment - 1,441,066,400

In previous financial period, the plant and equipment was in relation to 2 Rig Construction Contracts which were terminated by the supplier on 31 August 2017 as disclosed in Note 38.



32. CORPORATE GUARANTEE

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Corporate guarantee given for borrowings and other banking facilities of:

- Subsidiaries - - 1,256,151,634 1,306,218,404

- Joint ventures 227,582,353 361,691,627 227,582,353 361,691,627

227,582,353 361,691,627 1,483,733,987 1,667,910,031

33. RELATED PARTY DISCLOSURES

(a) Identity of related parties

For the purpose of these financial statements, parties are considered to be related to the Group and the Company if the Group and the Company have the ability to directly control the party or exercise significant influence over the party in making financial and operating decision, or vice versa, or where the Group and the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The Company has a related party relationship with its subsidiaries, associates, joint ventures, key management personnel, companies related to directors and affiliated companies. Companies related to directors refer to companies in which a director of the Company has substantial financial interests.

(b) Significant related party transactions and balances

Significant related party transactions other than disclosed elsewhere in the financial statements are as follows:

Group

Year ended

30.6.2018 RM


30.6.2017 RM

Affiliated companies

Charter income from:

- Emas Offshore Pte. Ltd. * (2,774,642) (25,372,000)

- Emas Offshore (M) Sdn. Bhd. * (10,349,679) (65,278,597)

Rental of office income from:

- Bayu Emas Maritime Sdn. Bhd. * (25,382) (433,696)

Interest receivable from:

- Emas Offshore (M) Sdn. Bhd. * (544,128) (353,128)

Interest payable to:

- EMAS Offshore Limited ^ 51,308 79,766



33. RELATED PARTY DISCLOSURES (CONTINUED)

(b) Significant related party transactions and balances (Continued)

Significant related party transactions other than disclosed elsewhere in the financial statements are as follows (Continued):

Group

Year ended

30.6.2018 RM


30.6.2017 RM

Joint venture

Rental office income from:

- Victoria Production Services Sdn. Bhd. # - (725,125)

Group/Company

Year ended

30.6.2018 RM


30.6.2017 RM

Associates

Agency fee to:

- Larizz Petroleum Services Sdn. Bhd. ** 180,000 270,000

Company


RM


30.6.2017 RM

Associates

Dividend received from:

- Larizz Petroleum Services Sdn. Bhd. ** (810,000) (3,018,000)

Subsidiaries

Agency fee paid or payable:

- Perisai Offshore Sdn. Bhd. *** 110,760 166,140

- Larizz Energy Services Sdn. Bhd. @ 180,000 270,000

Dividend received - (1,479,000)

Interest paid or payable 34,075,871 47,607,002

Interest received or receivable (24,746,745) (35,442,149)

Management fee income (1,880,614) (4,092,960)

Rental received 46,000 -




(b) Significant related party transactions and balances (Continued)

* The companies are subsidiaries of EMAS Offshore Limited. ** 60% equity interest of the company is owned by Datuk Zainol Izzet Bin Mohamed Ishak, the Managing Director

of the Company. *** 49% equity interest of the Company is owned by Datuk Zainol Izzet Bin Mohamed Ishak, the Managing Director

of the Company.^ EMAS Offshore Limited is a subsidiary of Ezra Holdings Limited.# A joint venture between the Company and EMAS Offshore Limited. @ 49% equity interest of the company is owned by Datuk Zainol Izzet Bin Mohamed Ishak, the Managing Director

of the Company.

Information regarding outstanding balances arising from related party transactions as at the reporting date is disclosed in Notes 17, 18 and 23.

(c) Compensation of key management personnel

Key management personnel includes personnel having authority and responsibility for planning, directing and controlling the activities of the entity, including any executive director of the Company.

The remuneration of the key management personnel is as follows:

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Executive directors’ remuneration:

- Short term employee benefits (including estimated monetary value of benefits-in-kind) 1,048,950 2,028,595 946,788 1,824,595

- Post employment benefits 178,317 353,978 165,036 327,458


1,341,027 3,894,097 1,225,584 3,663,577




(c) Compensation of key management personnel (Continued)

The remuneration of the key management personnel is as follows (Continued):

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Non-executive directors’ remuneration:

- Short term employee benefits

- Fee and emoluments 388,561 556,050 388,561 556,050


- Share options granted under ESOS 59,608 606,891 59,608 606,891

504,169 1,259,941 504,169 1,259,941

Total directors’ remuneration 1,845,196 5,154,038 1,729,753 4,923,518

Other key management personnel

- Short term employee benefits 2,592,746 4,316,013 2,478,746 4,145,013

- Post-employment benefits 260,064 425,025 248,748 408,051


3,144,690 7,459,801 3,019,374 7,271,827

4,989,886 12,613,839 4,749,127 12,195,345




(c) Compensation of key management personnel (Continued)

Total compensation of key management personnel comprise:

Group Company

Year ended

30.6.2018 RM


30.6.2017 RM


RM


30.6.2017 RM

Short-term employee benefits 4,086,257 6,997,658 3,870,095 6,622,658

Post-employment benefits 438,381 779,003 413,784 735,509


4,989,886 12,613,839 4,749,127 12,195,345

Other key management personnel comprises persons other than the directors of the Company, having authority and responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly.

Directors’ interest in employees’ share option scheme

Nil (2017: nil) option were exercised by these directors during the financial year.

At the reporting date, the total number of outstanding share options granted by the Company to the above-mentioned directors under the ESOS plan amounts to 23,875,850 (2017: 30,630,000).



34. FINANCIAL INSTRUMENTS

(a) Categories of financial instruments

The following table analyses the financial assets and liabilities in the statements of financial positions by the class of financial instruments to which they are assigned, and therefore by the measurement basis:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Financial assets

Loans and receivables

Trade receivables 28,642,458 30,403,194 - 526

Other receivables and deposits* 5,604,850 65,763,418 169,196 59,495,731

Deposits, cash and bank balances 28,385,391 16,392,276 1,318,598 1,229,421

62,632,699 112,558,888 1,487,794 60,725,678

Financial liabilities

Financial liabilities at amortised cost

Trade payables 14,740,678 16,120,893 - -

Other payables and accruals** 122,065,099 112,816,928 643,279,726 643,199,019

Loans and borrowings 1,229,496,400 1,317,869,233 57,763,800 58,484,241

Hire purchase payables - 95,000 - 95,000

1,366,302,177 1,446,902,054 701,043,526 701,778,260

* exclude GST refundable.** exclude GST payables and financial guarantee contracts.

(b) Fair value of financial instruments

The methods and assumptions used to determine the fair value of the following classes of financial assets and liabilities are as follows:

(i) Deposits, cash and bank balances, trade and other receivables and payables

The carrying amounts of deposits, cash and cash balances, trade and other receivables and payables are reasonable approximation of fair values due to short term nature of these financial instruments or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The fair value non-current other payable is estimated using discounted cash flows analysis, based on current lending rate for similar type of arrangement.



34. FINANCIAL INSTRUMENTS (CONTINUED)

(b) Fair value of financial instruments (Continued)

(ii) Borrowings

The carrying amounts of the current portion of borrowings including Medium Term Notes (“MTN”) are reasonable approximation of fair values due to the insignificant impact of discounting.

The carrying amounts of long term floating rate loans are reasonable approximation of fair values as the loans will be re-priced to market interest rate on or near reporting date.

The fair value of hire purchase payables is estimated using discounted cash flows analysis, based on current lending rate for similar types of borrowings.

The fair value of MTN was the quoted price at the end of the previous financial period.

The carrying amounts and fair values of financial instruments, other than those with carrying amounts are reasonable approximations of fair values are as follows:

Group Company

2018

Carrying Amount

RM

Fair Value

RM

Carrying Amount

RM

Fair Value

RM

Financial liabilities

Other payable

(non-current) 9,891,875 9,490,354 - -

2017

Other payable

(non-current) 10,520,300 9,349,329 - -

(c) Fair value measurement

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, the lowest level input that is significant to the fair value measurement as a whole:

(i) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

(ii) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

(iii) Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).



34. FINANCIAL INSTRUMENTS (CONTINUED)

(c) Fair value measurement (Continued)

The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities:

2018 Amount

RM Level 1

RM Level 2

RM Level 3

RM

Group

Other payable

(non-current) 9,490,354 - 9,490,354 -

2017

Other payable

(non-current) 9,349,329 - 9,349,329 -

During the financial year ended 30 June 2018, there was no transfer between Level 1 and Level 2 of the fair value measurement hierarchy.

35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s activities expose it to a variety of financial risks, including market risk (interest rate risk and foreign currency risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge designated risk exposures of the underlying hedge items and does not enter into derivative financial instruments for speculative purposes.

Risk management is carried out by a group treasury department under a policy approved by the Board of Directors. The policy provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and use of derivative financial instruments.

The following sections provide details regarding the Group’s and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk primarily arises from its receivables. For other financial assets, the Group minimises credit risk by dealing with high credit rating counterparties and creditworthy financial institutions. The maximum risk associated with recognised financial assets is the carrying amounts as presented in the statements of financial position and corporate guarantee provided by the Company to banks on subsidiaries’ credit facilities.



35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Credit risk (Continued)

Receivables The Group has a credit policy in place and the exposure to credit risk is managed through the application of credit

approvals, credit limits and monitoring procedures.

The Group has a significant concentration risk with three (2017: three) customers, on the entire of its trade receivables, contracted customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables. The ageing of trade receivables as at the end of the financial year/period is disclosed in Note 17.

Financial guarantee The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to subsidiaries

and joint ventures.

The Company monitors on an ongoing basis the repayments made by the subsidiaries and joint ventures and their financial performance.

The maximum exposure of the Group and the Company to credit risk amounts to RM227,582,353 (2017: RM361,691,627) and RM1,483,733,987 (2017: RM1,667,910,031) respectively representing the outstanding credit facilities of the subsidiaries and joint ventures guaranteed by the Company at the reporting date. At the reporting date, the subsidiaries and joint ventures had defaulted on their repayment. Consequently, the Company remeasured the fair value of financial guarantee contracts and recognised an amount of RM136,062,905 (2017: RM88,754,806) as at 30 June 2018.

The financial guarantee has not been recognised as the fair value on initial recognition was immaterial since the financial guarantee provided by the Company did not contribute towards credit enhancement of the subsidiaries and joint ventures’ borrowings in view of the security pledged by the subsidiaries and joint ventures and it is unlikely the subsidiaries and joint ventures will default within the guarantee period.

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to foreign currency is disclosed in the respective notes to the financial statements.

In the previous financial years, the Group and the Company had entered into cross currency interest rate swap contracts to hedge against fluctuations in the USD/SGD exchange rate on its MTN. The Group will pay USD in exchange of receiving SGD at a pre-determined exchange rate of SGD1.248 to USD1.00 upon maturity in year 2016 according to the scheduled repayment of the MTN.

The Group and the Company hold cash and banks denominated in foreign currencies for working capital purposes (mainly in USD and SGD) amounting to RM50,164 and RM48,016 (2017: RM63,750 and RM61,261) respectively.




(b) Foreign currency risk (Continued)

Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Group’s loss net of tax to a reasonably possible change in

the USD and SGD exchange rate against the functional currency of the Company and its subsidiaries, with all other variables held constant.

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

USD/RM

- strengthened 5% (2017: 5%) 192,750 353,088 8,932,428 24,105,820

- weakened 5% (2017: 5%) (192,750) (353,088) (8,932,428) (24,105,820)

SGD/RM

- strengthened 2% (2017: 2%) (79,291) (54,741) (8,784,488) (8,549,772)

- weakened 2% (2017: 2%) 79,291 54,741 8,784,488 8,549,772

RM/USD

- strengthened 5% (2017: 5%) 764,716 82,461 - -

- weakened 5% (2017: 5%) (764,716) (82,461) - -


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(d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s exposure to interest rate risk mainly relates to financial liabilities. The Group’s interest bearing financial liabilities comprise hire purchase payables and loans and borrowings.

The loans and borrowings of the Group and of the Company totalling RM859,183,900 and RM57,763,800 (2017: RM927,240,988 and RM57,705,996) respectively at floating rate expose the Group and the Company to cash flow interest rate risk whilst hire purchase payables and Medium Term Notes of RM370,312,500 (2017: RM389,945,000) at fixed rate expose the Group to fair value interest rate risk.

Sensitivity analysis for interest rate risk

As at the reporting date, a change of 25 basis points in interest rates, with all other variables held constant, would increase/decrease the total loss for the financial year/period of the Group and of the Company by RM2,147,960 and RM144,410 (2017: RM2,318,102 and RM144,265) respectively, arising mainly as a result of higher/lower interest expense on floating rate loans and borrowings.

36. CAPITAL MANAGEMENT

The primary objective of the Group’s and Company’s capital management is to ensure that they maintain a strong credit rating and healthy capital ratios in order to support their business and maximise shareholders’ value.

The Group and the Company manage their capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group and the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial year/period ended 30 June 2018 and 30 June 2017 other than the Company’s application in relation to the proposed plan has been submitted to Bursa Malaysia Securities Berhad and is currently pending for approval as disclosed in Note 2.2.

The Group and the Company monitor capital using a gearing ratio, which is net debts divided by total capital plus net debts. The Group’s and the Company’s policy is to maintain the gearing ratio not exceeding 250%. The Group and the Company include within the net debts, hire purchase payables, loans and borrowings less cash and bank balances. Capital includes equity attributable to owners of the Company add or less foreign currency translation reserve and the fair value adjustment reserve, if any.



36. CAPITAL MANAGEMENT (CONTINUED)

The gearing ratios at 30 June 2018 and 30 June 2017 were as follows:

Group Company

2018 RM

2017 RM

2018 RM

2017 RM

Loan and borrowings 1,229,496,400 1,317,869,233 57,763,800 58,484,241

Hire purchase payables - 95,000 - 95,000

Less: Deposits, cash and bank balances (28,385,391) (16,392,276) (1,318,598) (1,229,421)

Net debts 1,201,111,009 1,301,571,957 56,445,202 57,349,820

Equity attributable to owners of the Company (356,824,913) 132,061,358 (417,107,442) (47,848,447)

Less: Foreign currency translation reserve (259,199,219) (293,056,671) - -

Total capital (616,024,132) (160,995,313) (417,107,442) (47,848,447)

Capital and net debts 585,086,877 1,140,576,644 (360,662,240) 9,501,373

Gearing ratio 205% 114% n/m 604%

n/m – not meaningful

The Company and certain subsidiaries are required to comply with certain loan-to-value ratio, consolidated net worth, consolidated borrowings to consolidated net worth ratio and interest coverage ratio in respect of the term loans and MTN facilities. The Company and its subsidiaries have not complied with the capital requirements during the financial year. Accordingly, the borrowings had been reclassified as current liability during the previous financial period.

37. CONTINGENCIES

On 22 August 2017, Perisai Drilling Sdn. Bhd. (“PDSB”), an indirect subsidiary of the Company had been served with a Notice of Demand (“Notice”) from Skrine acting on behalf of Konsortium Pelabuhan Kemaman Sdn. Bhd. (“KPKSB”), Pangkalan Bekalan Kemaman Sdn. Bhd. (“PBKSB”) and EPIC Mushtari Engineering Sdn. Bhd. (“EPIC”) (Collectively the “Claimants”) demanded for the sum of RM13,682,060 due and owing to the Claimants.

The claim originated from the letter of offer dated 1 August 2016 (“Letter of Offer”) in which EPIC agreed to offer PDSB its facilities including but not limited to providing berthing space for its rig namely, Perisai Pacific 101 (“Rig”) within the Kemaman Port. The Notice alleges that as a result of PDSB’s failure to moor the Rig on 5 September 2016, the Rig broke free of the moorings, drifted off and came into contact with a mobile offshore unit, namely Naga 4 and subsequently, the Rig continued drifting and collided with Berth 6 and 7 respectively, which are owned by PBKSB. The Notice further alleges that as a result of the collision, the finger jetty, Berth 6 and 7 and quay wall/wharf of Pangkalan Bekalan Kemaman were damaged.



37. CONTINGENCIES (CONTINUED)

The Notice alleges that due to the breach of PDSB’s contractual obligations to moor the Rig under the Letter of Offer, the Claimants had suffered losses and damages in the sum of RM13,682,060 as at 4 August 2017 as follows:

a. Rectification works to the East Wharf in the sum of RM4,588,937;b. Fees payable for the police report, weather report and meteorology data in the sum of RM822;c. Fees payable to the consultants in the sum of RM445,031; andd. Loss of revenue due to the Claimants inability to use Berth 6 and 7 at the East Wharf in the sum of RM8,647,269 (this

loss is continuing and the Claimants reserve their rights to claim for loss of revenue suffered after 4 August 2017).

Following the Notice, PDSB had on 13 October 2017 been served with a Writ of Summons and Statement of Claim dated 9 October 2017 from Skrine acting on behalf of the Claimants demanded for the sum of RM13,682,060 due and owing to the Claimants. The circumstances leading to the filing of the Writ of Summons and Statement of Claim against PDSB, alleging a sum of RM13,682,060 being the PDSB had failed to use reasonable care and skill to ensure mooring of the Rig within the Kemaman Port. PDSB had duly notified its insurer regarding the claim and the insurer had duly appointed solicitors to defend the legal action.

As at 30 June 2018, the Group has recognised a provision for the claim amounting to RM5,034,791 (2017: RM5,034,791) as disclosed in Note 24. The remaining potential liability has not been recognised as the Group is unable to estimate reliably the amount of the obligation. The directors are of the opinion that the remaining potential liability would be sufficiently covered under the existing insurance contracts. An insurance receivable of an equal amount was recognised as at 30 June 2018 as the Group has an insurance contracts cover for the third parties’ claims as disclosed in Note 18.

38. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Other than as disclosed elsewhere in the financial statements, the following are significant events during the financial year:

(a) On 17 August 2017, the Company announced that the Proposed Settlement Agreement as disclosed in Note 16 has been aborted. Accordingly, the Put Option is revived and the Company is pursuing the completion of the Put Option.

(b) PPL Shipyard Pte. Ltd. (“PPL”) had on 31 August 2017 served a notice of termination (“Notice”) to Perisai Pacific 102 (L) Inc. (“PP102”), to terminate the Rig Construction Contract dated 28 February 2013.

The termination of the contract resulted in the forfeiture of the deposit paid which have been fully impaired as at financial period end and released the Group from the prepayment of balance purchase price of the rig.

(c) PPL had on 31 August 2017 served a notice of termination (“Notice”) to Perisai Pacific 103 (L) Inc., to terminate the Rig Construction Contract dated 31 December 2013.

The termination of the contract resulted in the forfeiture of the deposit paid which have been fully impaired as at financial period end and released the Group from the prepayment of balance purchase price of the rig.

(d) EMAS Offshore Limited (“EOL”) had on 27 September 2017 written to the Company stating that due to the lapse of

the Settlement Agreement, the Company is now required to comply with the Shareholders’ Agreement dated 26 December 2013, which was terminated by EOL’s notice dated 8 December 2016 (“Termination Notice”), and the Company is obliged to complete the sale of the 51% shares in SJR Marine (L) Ltd. to EOL at the stated price of USD1.00.

(e) On 11 October 2017, the Court has granted order that PP102 be wound up by the Court under the provisions of the Companies Act 2016, the Director General of Insolvency be appointed as the Liquidator of PP102, and the costs of and incidental to this Petition be paid out of the assets of PP102.

The effective date for the winding up and liquidation process commenced on 11 October 2017.



38. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONTINUED)

(f) On 8 June 2018, in the court convened meeting, the scheme creditors of the Company have approved the scheme with requisite majority.

39. SIGNIFICANT EVENTS SUBSEQUENT TO THE FINANCIAL YEAR END

Other than as disclosed elsewhere in the financial statements, the following are significant events subsequent to the financial year end:

(a) On 4 July 2018, the Company served a Notice of Assignment to EOL in relation to the Assigned Rights (as defined herein below):-

i) By a Deed of Assignment dated 2 February 2018 made by the Company in favour of PPHSB, the Company has assigned to PPHSB the proceeds of the Put Option (equivalent to the sum of USD43,031,407) and the rights and entitlement to claim for such proceeds which are now owing and due from EOL to the Company pursuant to the Company’s exercise of the right to sell of the Company’s remaining equity interest in SJR Marine (L) Ltd (“SJR Marine”), representing 51% of the equity interest in SJR Marine, vide the Company’s Put Option Notice dated 8 December 2016 (“Put Option”)(“Assigned Rights”).

ii) EOL that EOL is irrevocably authorised and instructed to pay to PPHSB all sums which are due to pay by EOL to the Company pursuant to exercise of the Put Option.

(b) On 1 August 2018, the application in relation to the proposed regularisation plan has been submitted to Bursa Malaysia Securities Berhad (“Bursa Securities”) for approval.

(c) On 8 August 2018, the Company has obtained an extension of the Restraining Order from the High Court of Malaya at Kuala Lumpur for a further period of nine (9) months effective from 8 August 2018 restraining all proceedings and actions brought against the Company.

40. MATERIAL LITIGATION

(a) On 15 May 2017, a Winding-Up Petition pursuant to Section 218 of the Companies Act, 1965 together with a copy of the Affidavit Verifying Petition (“the said Winding-Up Petition”) has been served on Perisai Pacific 102 (L) Inc. (“PP102”), a subsidiary of Perisai Drilling Holdings Sdn. Bhd. (a wholly-owned subsidiary of the Company) by Messrs Yeoh & Joanne, the Solicitors who act on behalf of Tech Offshore Marine (S) Pte. Ltd. (“Tech Offshore”) demanding for the payment of the total outstanding sum owing by PP102 to Tech Offshore amounting to USD178,636. The amount has been recognised in the financial statements of the Group.

The Winding-Up Petition was presented to the High Court of Sabah and Sarawak in the Federal Territory of Labuan and the hearing is fixed on 4 September 2017 and was subsequently fixed on 11 October 2017.

The Company did not contest the winding-up proceedings.

On 11 October 2017, the Honourable Court granted the Winding Up Order. The liquidation process commenced and reflected accordingly in the financial results.

(b) As disclosed in Note 37, PDSB had on 13 October 2017 been served with a Writ of Summons and Statement of Claim dated 9 October 2017 from Skrine acting on behalf of the Claimants demanded for the sum of RM13,682,060 due and owing to the Claimants. The circumstances leading to the filing of the Writ of Summons and Statement of Claim against PDSB, alleging a sum of RM13,682,060 being the PDSB had failed to use reasonable care and skill to ensure mooring of the Rig within the Kemaman Port. PDSB had duly notified its insurer regarding the claim and the insurer had duly appointed solicitors to defend the legal action.



40. MATERIAL LITIGATION (CONTINUED)

(c) On 21 November 2017 Alpha Perisai Sdn Bhd (“APSB”), a wholly-owned subsidiary of the Company had been served with a Letter of Demand dated 20 November 2017 from Shaikh David & Co., acting on behalf of Teknik Janakuasa Sdn Bhd (“the Plaintiff”) demanded for the rental arrears and rental for unexpired term amounting to RM2,754,754 due and owing to the Plaintiff pursuant to the tenancy agreement dated 27 May 2013 (“Tenancy Agreement”) entered into between APSB and the Plaintiff in respect of the premises known as Level 13A, Block 3B, Plaza Sentral, Jalan Stesen Sentral 5, 50470 Kuala Lumpur (“Demised Premises”). APSB is required to pay the total sum of RM2,754,754 together with interest within 7 days from the date of the Letter of Demand.

APSB has been served with a Writ and Statement of Claim dated 13 December 2017 from Messrs Shaikh David & Co acting on behalf of the Plaintiff. After several hearings between March 2018 till August 2018, on 4 September 2018, the high court partially allowed the termination of the Appeal Judgement (“the Appeal”), whereby:-

(i) the amount outstanding for the months of June 2016 to June 2017 in the total sum of RM994,772 (as admitted by the APSB) was allowed.

(ii) the rental for the unexpired term in the total sum of RM1,759,982 was not allowed and trial date(s) for the same would need to be set by the Sessions Court.

(iii) the costs of RM3,000 to be paid by the APSB to the Plaintiff will be set off against the costs obtained from the Plaintiff in the Sessions Court.

As of 30 June 2018, the Group has recognised a provision for onerous contract amounting to RM2,754,754 as disclosed in Note 24, pending the Plaintiff’s claim to be struck off.

41. COMPARATIVE FIGURES

The comparative figures of the preceding financial period covered a period of 18 months from 1 January 2016 to 30 June 2017 whilst the figures of the current financial year’s financial statements covered a period of 12 months from 1 July 2017 to 30 June 2018. Accordingly, the statements of profit or loss and other comprehensive income, statements of changes in equity, statements of cash flows and their related notes are not in respect of comparable periods.

42. SEGMENT INFORMATION

(a) Operating segments

For management purposes, the Group is organised into business segments based on their services and has three reportable operating segments as follows:

(i) Drilling Units - Operations and maintenance service and provision of offshore assets which are primarily for oil and gas offshore drilling.

(ii) Production Units - Operations and maintenance service and provision of offshore assets which are primarily for oil and gas offshore production.

(iii) Marine vessels - Provision of vessels, barges and equipment on vessels charter services.

Other non-reportable segment comprises investment holding and management services.



42. SEGMENT INFORMATION (CONTINUED)

(a) Operating segments (Continued)

Management monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects is measured differently from operating profit or loss in the consolidated financial statements.

Segment assets and liabilities information are neither included in the internal management reports nor provided

regularly to the management. Hence, no disclosures are made on segment assets and liabilities.

Transfer prices between operating segments are carried out on negotiated terms.

(b) Geographical segments

Segmental reporting by geographical segments has not been prepared as the Group’s operation are carried out predominantly in Malaysia.

Revenue information based on the geographical location of customers is as follows:

Year ended

30.6.2018 RM


30.6.2017 RM

Malaysia 124,405,136 250,214,632

Republic of Singapore 2,774,642 25,372,000

127,179,778 275,586,632

All non-current assets (excluding deferred tax assets and financial instruments) of the Group based on the geographical location of entities holding the assets are located in Malaysia.


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STATEMENT BY DIRECTORS(Pursuant to Section 251(2) of the Companies Act 2016)

STATUTORY DECLARATION(Pursuant to Section 251(1) of the Companies Act 2016)

We, Dato’ Anwarrudin Bin Ahamad Osman and Datuk Zainol Izzet Bin Mohamed Ishak, being two of the directors of Perisai Petroleum Teknologi Bhd., do hereby state that, in the opinion of the directors, the accompanying financial statements as set out on pages 70 to 170 are drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2018 and of their financial performance and cash flows for the financial year then ended.

Signed on behalf of the Board of Directors in accordance with a resolution of the directors:

DATO’ ANWARRUDIN BIN AHAMAD OSMAN DATUK ZAINOL IZZET BIN MOHAMED ISHAKDirector Director


I, Yeo Peck Chin, being the officer primarily responsible for the financial management of Perisai Petroleum Teknologi Bhd., do solemnly and sincerely declare that the best of my knowledge and belief, the accompanying financial statements set out on pages 70 to 170 are correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

YEO PECK CHINMIA Membership No: 11356

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 27 September 2018.

Before me,

TAN KIM CHOOI (No.W661)Commissioner for OathsKuala Lumpur, Malaysia


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PERISAI PETROLEUM TEKNOLOGI BHD.

(Incorporated in Malaysia)

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Perisai Petroleum Teknologi Bhd., which comprise the statements of financial position as at 30 June 2018 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 70 to 170.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 June 2018, and of their financial performance and their cash flows for the financial year then ended in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 2.2 to the financial statements, which disclosed that the Group and the Company incurred net losses of RM469,252,755 and RM369,853,195 respectively. As at that date, the Group and the Company recorded net current liabilities of RM1,309,316,264 and RM835,334,174 and capital deficiencies of RM258,582,123 and RM417,107,442 respectively. As stated in Note 2.2 to the financial statements, these events or conditions, along with other matters as set forth in Note 2.2 to the financial statements indicate that a material uncertainty exists that may cast significant doubt about the Group’s and the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Material Uncertainty Related to Going Concern section, we have determined the matters below to be the key audit matters to be communicated in our report.

Plant and equipment and investments in joint ventures (Note 2.8(a), 12 and 16 to the financial statements)

The Group has significant balances of plant and equipment and investments in joint ventures relating to its oil and gas operations which was previously impaired in the previous financial years. The directors have continued perform an impairment assessment in the current financial year to estimate the recoverable amount of these assets with reference to the valuation performed by external independent valuers. We focused on this area because the directors’ assessment of the fair value of the assets involved significant judgements.


iNdepeNdeNt AUditors’ report TO THE MEMBERS OF PERISAI PETROLEUM TEKNOLOGI BHD.


Our audit response:

Our audit procedures included, among others: • evaluating the competence, capabilities and objectivity of the external valuers which included consideration of their

qualifications and experience;• understandingthescopeandpurposeofthevaluationbyreadingthecorrespondenceswiththevaluerandtheirreport;• readingthevaluationreportsanddiscussingwithexternalvaluersontheirvaluationapproachandthesignificantjudgements

made; and • testingthemathematicalcalculationoftheimpairmentassessment.

Financial guarantee contracts (Note 2.8(b) and 23 to the financial statements)

The Company provides corporate guarantees to the lenders of its subsidiaries and joint ventures, including the payment obligations under the Medium Term Notes Programme (“MTN”). During the financial year, the Company had recognised an expense of RM52,573,106 in respect of the financial guarantee contracts provided to the subsidiaries. We focused on this area because significant judgement is required in estimating the expenditure which is the expected cash outflows required to settle the defaulted borrowings and interest payables of the subsidiaries and joint ventures, including the value of assets pledged for the borrowings.

Our audit response:

Our audit procedures included, among others: • assessingthedirectors’basisinarrivingattheirjudgementonthelikelihoodandamountofthecashoutflowsrequiredtosettle

the defaulted borrowings and interest payables; and• assessingthereasonablenessoftheamountrecognisedforfinancialguaranteecontracts.

Information Other than the Financial Statements and Auditors’ Report Thereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.




The directors of the Company are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

• evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.




Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 14 to the financial statements.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents of this report.

Baker Tilly Monteiro Heng Andrew Choong Tuck KuanNo. AF 0117 No.03264/04/2019 JChartered Accountants Chartered Accountant

Kuala Lumpur



ANALYSIS OF SHAREHOLDINGSAS AT 28 SEPTEMBER 2018

Issued & Paid-up Share Capital : RM770,888,300 comprising 1,260,872,078 ordinary shares Class of Share : Ordinary shares Voting Rights : 1 vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholdings No. of Shareholders Total Holdings %

Less than 100 shares 270 10,317 0.00

100 - 1,000 shares 850 602,422 0.05

1,001 - 10,000 shares 5,207 31,401,212 2.49

10,001 - 100,000 shares 5,318 209,858,968 16.64

100,001 and less than 5% of issued shares 1,409 737,654,909 58.50

5% and above of the issued shares 2 281,344,250 22.31

Total 13,056 1,260,872,078 100.00

SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS

No. of Ordinary Shares Held

No. Name of Shareholders Direct Interest %* Indirect Interest %*

1. Ezra Holdings Limited - - 281,344,2501 22.32

2. EMAS Offshore Limited 144,661,250 11.48 - -

3. HCM Logistics Limited 136,683,000 10.84 - -

Notes:-1 Deemed interested by virtue of the company’s interest in EMAS Offshore Limited and HCM Logistics Limited pursuant to

Section 8 of the Companies Act, 2016.* Excluding a total of 400,000 ordinary shares bought back by the Company and retained as treasury shares.


ANALYsis oF sHAreHoLdiNGsAS AT 28 SEPTEMBER 2018

DIRECTORS’ SHAREHOLDINGS AND OPTIONS HELD UNDER THE EMPLOYEES’ SHARE OPTION SCHEME

No. of Ordinary Shares Held No. of Options HeldNo. Name of Shareholders Direct Interest %* Deemed Interest %*

1. Dato’ Anwarrudin Bin Ahamad Osman - - - - 2,340,0002. Datuk Zainol Izzet Bin Mohamed Ishak 29,473,900 2.34 - - 11,200,0003. Dato’ Yogesvaran A/L T. Arianayagam 3,006,207 0.24 - - 2,340,0004. Dato’ Dr. Mohamed Ariffin Bin Hj. Aton 85,000 0.01 - - 1,640,0005. Chan Feoi Chun 500,000 0.04 - - 1,440,000

* Excluding a total of 400,000 ordinary shares bought back by the Company and retained as treasury shares.


THIRTY (30) LARGEST SHAREHOLDERSAS AT 28 SEPTEMBER 2018

No. Name of Shareholders No. of Ordinary Shares Held %*

1. Maybank Securities Nominees (Asing) Sdn Bhd

(Maybank Kim Eng Securities Pte Ltd for DNB Asia Ltd)# 144,661,250 11.48

2. HSBC Nominees (Asing) Sdn Bhd

(Pledged Securities Account HSBC Singapore for HCM Logistics Limited) 136,683,000 10.84

3. Lynear Plus Limited 49,830,800 3.95

4. RHB Nominees (Tempatan) Sdn Bhd

(Soo Chew Sheng) 26,000,000 2.06

5. Zainol Izzet Bin Mohamed Ishak 25,873,900 2.05

6. Yew Soon Keong 20,000,000 1.59

7. HSBC Nominees (Asing) Sdn Bhd

(Exempt An for Bank Julius Baer & Co. Ltd. [Singapore BCH]) 18,200,000 1.44

8. Toh Seng Hon 13,000,000 1.03

9. Tan Kean Yip 7,000,000 0.56

10. Soon Choong Teck 6,850,000 0.54

11. Krishna Moorthy A/L Nookannah 6,700,000 0.53

12. Tan Onn Poh 5,000,000 0.40

13. Kong Ah Then 4,429,000 0.35

14. Lee May Lan 4,202,900 0.33

15. Maybank Nominees (Asing) Sdn Bhd

(Su Kuei Hui @ Sophia Su) 4,100,000 0.33

16. Teh Bee Lan 4,068,200 0.32

17. Ting Chee Ming 4,000,000 0.32

18. Phang Kin Cheong @ Phang Ngok Kee 4,000,000 0.32

19. Lee Ah Lik 3,983,200 0.32

20. Lim Seng Chee 3,924,000 0.31

21. Affin Hwang Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Cheh Kah Mun) 3,912,000 0.31

22. Raja Muhammad Bin Raja Omar 3,751,700 0.30

23. Gary Heah Hye Seng 3,700,000 0.29

24. Maybank Nominees (Tempatan) Sdn Bhd

(Pledged Securities Account for Zainol Izzet Bin Mohamed Ishak) 3,600,000 0.29

25. Zulkifli Bin Ismail 3,599,100 0.29

26. Lee See Jin 3,500,000 0.28

27. UOB Kay Hian Nominees (Asing) Sdn Bhd

(Exempt an for UOB Kay Hian Pte Ltd [A/C Clients]) 3,049,400 0.24

28. Yogesvaran A/L T Arianayagam 3,006,184 0.24

29. Ng Chiew Peng 3,000,000 0.24

30. Cimsec Nominees (Tempatan) Sdn Bhd

Pledged Securities Account For Ong Teng Chai (J Bendahara-Cl) 2,900,000 0.23

TOTAL 526,524,634 41.77

# Beneficially held by EMAS Offshore Limited * Excluding a total of 400,000 ordinary shares bought back by the Company and retained as treasury shares.


NOTICE OF FIFTEENTHANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Fifteenth Annual General Meeting of PERISAI PETROLEUM TEKNOLOGI BHD. (“Perisai” or “Company”) will be held at Mahkota Ballroom II, Hotel Istana Kuala Lumpur City Centre, 73, Jalan Raja Chulan, 50200 Kuala Lumpur on Thursday, 29 November 2018 at 10.00 a.m. to transact the following businesses:-

AGENDA

AS ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the financial year ended 30 June 2018 together

with the Reports of the Directors and Auditors thereon. 2. To approve the payment of Directors’ fees and benefits payable to the Directors up to an

aggregate amount of RM366,200 from 29 November 2018 until the next Annual General Meeting of the Company.

3. To re-elect the following Directors retiring in accordance with Article 93 of the Company’s

Constitution and being eligible, have offered themselves for re-election:-(a) Datuk Zainol Izzet Bin Mohamed Ishak (b) Dato’ Anwarrudin Bin Ahamad Osman

4. To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following Resolutions:- 5. AUTHORITY UNDER SECTIONS 75 AND 76 OF THE COMPANIES ACT 2016 FOR THE

DIRECTORS TO ALLOT AND ISSUE SHARES

“THAT pursuant to Sections 75 and 76 of the Companies Act 2016, the Directors be and are hereby authorised to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the total number of issued shares of the Company for the time being, subject always to the approval of all relevant regulatory bodies being obtained for such allotment and issuance.”

6. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

“THAT pursuant to Paragraph 10.09 of the Main Market Listing Requirements of Bursa Securities, approval be and is hereby given to the Company and its subsidiaries (the “Group”) to enter into and give effect to the specified recurrent related party transactions of a revenue or trading nature with the specified classes of related parties as set out in Section 2.3 of the Circular to Shareholders dated 26 October 2018 (the “Circular”), provided that:-

Please refer to Note 1 of the Explanatory Notes

Ordinary Resolution 1

Ordinary Resolution 2Ordinary Resolution 3

Ordinary Resolution 4

Ordinary Resolution 5Please refer to Note 2 of the Explanatory Notes

Ordinary Resolution 6Please refer to Note 3 of the Explanatory Notes


Notice oF FiFteeNtHANNUAL GeNerAL MeetiNG

(i) such arrangements and/or transactions are necessary for the Group’s day-to-day operations;

(ii) such arrangements and/or transactions undertaken are in the ordinary course of business and are carried out at arm’s length basis on normal commercial terms which are not more favourable to the related parties than those generally available to the public;

(iii) such arrangements and/or transactions are not detrimental to the non-interested shareholders of the Company; and

(iv) the disclosure is made in the Annual Report on the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year in relation to:-

(a) the related transacting parties and their respective relationship with the Company; and

(b) the nature of the recurrent transactions.

AND THAT such authority shall continue to be in force until:-

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general meeting at which such mandate is passed, at which time it will lapse, unless the authority is renewed by a resolution passed at the meeting;

(ii) the expiration of the period within which the next AGM is required to be held pursuant to Section 340(2) of the Companies Act 2016 (but must not extend to such extension as may be allowed pursuant to Section 340(4) of the Companies Act 2016; or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting of the Company,

whichever is the earlier;

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this resolution.”

7. To transact any other business for which due notice shall have been given. BY ORDER OF THE BOARD

TAI YIT CHAN (MAICSA 7009143)TAN AI NING (MAICSA 7015852)Company Secretaries Kuala Lumpur26 October 2018


NOTES ON APPOINTMENT OF PROXY:

1. In respect of deposited securities, only members whose names appear on the Record of Depositors as at 21 November 2018 (General Meeting Record of Depositors) shall be entitled to attend the meeting or appoint proxy(ies) to attend, speak and vote on his/her behalf.

2. A member of the Company entitled to attend, speak and vote at the Meeting is entitled to appoint a proxy or proxies to attend, speak and vote on his/her behalf.

3. A Proxy need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.

4. A member shall be entitled to appoint more than two proxies to attend and vote at the same meeting.

5. Where a member appoints two or more proxies, the proxies shall be invalid unless the proportion of his/her holdings to be represented by each proxy is specified.

6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one proxy in respect of each securities account it holds in ordinary shares of the Company standing to the credit of the said securities account.

7. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

8. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

9. The instrument appointing a proxy, together with the power of attorney (if any) under which it is signed or a certified copy thereof, shall be deposited at the Company’s Share Registrar’s office at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur, not less than 48 hours before the time of meeting or any adjourned meeting, otherwise the instrument of proxy shall not be treated as valid.

EXPLANATORY NOTES

1. To receive the Audited Financial Statements for the financial year ended 30 June 2018 together with the Reports of the Directors and Auditors

This Agenda item is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act 2016 do not require approval from the shareholders and hence it is not put forward for voting.

2. Ordinary Resolution 5 - Authority under Sections 75 And 76 of The Companies Act 2016 for the Directors to Allot and Issue Shares

The proposed Ordinary Resolution 5 is to seek the shareholders’ approval on the renewal of the general mandate for the issuance of shares by the Company under Sections 75 and 76 of the Companies Act 2016. If the resolution is duly passed, it is primarily to give flexibility to the Directors to issue and allot shares at any time in their absolute discretion and for such purposes as they consider would be in the interest of the Company without convening a general meeting. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company.

At this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is sought, the Company will make an announcement in respect thereof.

The Company did not allot and issue any shares pursuant to the general mandate granted by the shareholders at the previous AGM.



3. Ordinary Resolution 6 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of A Revenue or Trading Nature

The proposed Ordinary Resolution 6, if passed, will enable the Company and/or its subsidiaries to enter into recurrent related party transactions which are of a revenue or trading nature and necessary for the Group’s day-to-day operations, provided that such transactions are carried out in the ordinary course of business and undertaken at arm’s length basis and on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the non-interested shareholders of the Company.

Please refer to the Circular to Shareholders dated 26 October 2018 which is despatched together with the Company’s Annual Report 2018, for further information.

Personal data privacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.


FORM OF PROXY(Before completing this form please refer to the note below)

PERISAI PETROLEUM TEKNOLOGI BHD.(Company No. 632811-X)(Incorporated in Malaysia)

CDS Account No: No. of Shares Held

I/We NRIC/Passport/Company No. (Full Name in block letters)of (Full Address)

being a member/members of PERISAI PETROLEUM TEKNOLOGI BHD. hereby appoint the following person(s): -

Name of proxy, NRIC No. & AddressNo. of shares to be

represented by proxy

1.

2.

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Fifteenth Annual General Meeting (“AGM”) of the Company to be held at Mahkota Ballroom II, Hotel Istana Kuala Lumpur City Centre, 73, Jalan Raja Chulan, 50200 Kuala Lumpur on Thursday, 29 November 2018 at 10.00 a.m. and at any adjournment thereof. My/our proxy/proxies is/are to vote as indicated below:-

NO. ORDINARY RESOLUTION

FIRST PROXY SECOND PROXY

For Against For Against

1 To approve the payment of Directors’ fees and benefits payable to the Directors up to an aggregate amount of RM366,200 from 29 November 2018 until the next Annual General Meeting of the Company

2 Re-election of Datuk Zainol Izzet Bin Mohamed Ishak

3 Re-election of Dato’ Anwarrudin Bin Ahamad Osman

4 Re-appointment of Messrs Baker Tilly Monteiro Heng as Auditors of the Company

5 Authority to allot and issue shares pursuant to Sections 75 and 76 of the Companies Act, 2016

6 Proposed renewal of shareholders’ mandate for the Recurrent Related Party Transactions of a Revenue or Trading Nature

(Please indicate with a “√” or “X” in the spaces provided how you wish your vote to be cast. If no instruction as to voting is given, the proxy/proxies may vote or abstain from voting at his/her/their discretion. The first named proxy shall be entitled to vote on a show of hands on my/our behalf.

Dated this ___________ day of ___________, 2018 ________________________________ Signature/Common Seal

NOTES ON APPOINTMENT OF PROXY

1. For the purpose of determining a member who shall be entitled to attend and vote at the AGM, the Company shall be requesting the Record of Depositors as at 21 November 2018. Only a depositor whose name appears on the Record of Depositors as at 21 November 2018 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

2. A member of the Company entitled to attend, speak and vote at the Meeting of the Company is entitled to appoint a proxy or proxies to attend, speak and vote on his/her behalf.

3. A Proxy need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.

4. A member shall be entitled to appoint more than two proxies to attend and vote at the same meeting.

5. Where a member appoints two or more proxies, the proxies shall be invalid unless the proportion of his/her holding to be represented by each proxy is specified.

6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one proxy in respect of each securities account it holds in ordinary shares of the Company standing to the credit of the said securities account.

7. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

8. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

9. The instrument appointing a proxy, together with the power of attorney (if any) under which it is signed or a certified copy thereof, shall be deposited at the Company’s Share Registrar’s office at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur, not less than 48 hours before the time of meeting or any adjournment thereof.

Personal Data Privacy: -By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of AGM dated 26 October 2018.

Fold this flap for sealing

Then fold here

AFFIXSTAMP

1st fold here

PERISAI PETROLEUM TEKNOLOGI BHD. (632811-X)c/o Mega Corporate Services Sdn. Bhd. (187984-H)Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala Lumpur

www.perisai.biz

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PERISAI PETROLEUM TEKNOLOGI BHD. (632811-X)Suite 3A-17, Level 17Block 3A, Plaza SentralJalan Stesen Sentral 550470 Kuala LumpurMalaysiaEmail: [email protected]